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Aviation History
1986
1986 - 0501.PDF
AIR TRANSPORT French banks fund A320 PARIS A group of French banks led by Paribas is putting together a loan package to help finance part of the development costs of Airbus' A320 programme. It is the first deal of its kind in France, and probably in Europe, in the field of major aircraft construction, reports Gilbert Sedbon. A consortium of 13 leading banks, headed by state-owned Paribas, is extending a pre liminary credit of FFr 400 million ($54 million) to Aero spatiale. Previously the French state, like other member governments, has advanced the necessary funds, which were repayable on sales. The loan, at an undisclosed interest rate, is not guaran teed by the Government. It will be repaid by a levy of 2 per cent of the sales price of A320s—currently about $33 million—on the first 130 aircraft delivered starting in 1989, when the A320 goes into commercial service. Airbus has already booked 100 firm A320 orders, plus 157 options. It expects to sell more than 1,000 aircraft by the year 2004. The world market needs exceed 4,000 aircraft, it says. With interest, the total Paribas loan may reach FFr 500 million. This will help bridge a key period for Aero spatiale, in which devel opment costs for the A320 would normally be met, above all, from Government funds. The move also represents increased efforts by Airbus to turn to commercial sources of funds for future programmes, especially the A330 and A340 projects. Airbus will be look ing for a total of $2,500 million to finance the A330 short- to medium-range and the A340 long-range airliners. The news is encouraging for British Aerospace, which is pressing the UK Government for up to £500 million launch aid for the development of the A330/340 wing while exploring ways of tapping commercial markets itself should the cash not be forth- Lufthansa was an Airbus launch customer, and is said to be a contender for the A340 but not for the A320 I coming. ^FLIGHT INTERNATIONAL, 8 March 1986 Delta calls in mediator ATLANTA ~1 Delta Air Lines has called in a Federal mediator after eight months' negotiating with its pilots' union. "Progress just wasn't being made," a spokes man said. The dispute is over pro ductivity levels which the management wants to en force, and is unlikely to end in an all-out strike. The 4,000 pilots and 120 flight dis patchers are the only union ised workers among Delta's 38,500 employees. "It could take a couple of months," the airline says, "but we're opti mistic we can get this thing sorted out". Europe, USA discuss trade GENEVA ~ US Department of Trade offi cials will meet with their British, French, and West German counterparts in Geneva on March 20-21, to discuss American allegations that "unfair practices" are used to sell Airbus products. The informal talks have been proposed by the three European Governments in a move to head off possible US retaliation against Airbus Industrie. Discussions will cover four major areas of US concern: the extent of government subsidies for Airbus develop ment; possible political and economic inducements to Airbus customers; govern ment intervention in the procurement decisions of their domestic airlines; and the degree to which US part suppliers are able to market their products to Airbus. The Europeans in turn will question the US delegation about what they claim is unfair support for US aircraft manufacturers via govern ment spending on defence and the space programme. Monarch plans 757 "Etops" LUTON ~ UK charter carrier Monarch plans to inaugurate trans atlantic 757 charters next year, meeting Civil Aviation Authority safety require ments for Etops (extended- range twinjet operations). Monarch managing direc tor Alan Snudden tells Flight that he hopes to start a modest initial programme of weekly flights from London Gatwick to New York Newark and Toronto in May 1987. Luton-based Monarch, whose new £2| million engineering facility was opened last week by CAA chairman Sir John Dent, is planning to add two 757s and three 737-300s to its 1987 fleet of four and three respectively. Lufthansa defends its dollar-dealing COLOGNE Lufthansa is embarrassed by the publicity which has been heaped on its loss-making currency dealing. The airline bought dollars in February 1985 to hedge against the purchase of ten 737-300s and three 747s for delivery from late summer 1986. This advance purchase of currency to lessen the over all risk of paying in dollars for aircraft worth more than $500 million amounted to just under 30 per cent of their total value. The Press has latched on to the fact that dollars bought at DM3-2 are now worth only DM2 • 34, and esti mates that the carrier is now DM200 million ($84 million) short. Lufthansa maintains that hedging some of the cost to pay a mixed rate, which works out at DM2-71 at today's rates, is standard practice. Besides, it points out, the dollar went up to DM3-46 before falling. The exchange loss "will have a very, very minute effect on the balance sheet," a spokesman says. "Lufthansa will again be posting profit for 1985, and 1986 will be positive," he adds. As for chairman Heinz Ruhnau, whose resignation has been rumoured, "he's still there, alive and kicking".
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