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Aviation History
1989
1989 - 1400.PDF
Unprofitable Pan Am makes Northwest bid by Kieran Daly Impecunious Pan American World Airways' audacious pro posal for a cash takeover of fourth-ranking US carrier Northwest Airlines comes just days after Pan Am announced losses of more than $150 million for the first three months of this year. The move astonished analysts, who highlighted the practical difficulties in merging the two operations even if Pan Am proves able to raise the required funds. NWA is esti mated to be worth some $3 billion. Pan Am anticipated its first- quarter loss, up 80 per cent on 1988, blaming the Lockerbie 747 bombing and the resulting 16 per cent drop in transatlantic traffic. "All of the $56 million decline in passenger revenues in the first quarter ... is related to Lockerbie," the airline says, reporting stronger bookings for the second quarter. Increased domestic revenue resulting from the Eastern Air lines' strike was offset by a drop in earnings on Pan Am's inter nal West German services. It was against this back ground that Pan Am chairman Thomas Plaskett announced the proposal to buy Northwest, stressing that the carriers had "virtually no overlapping routes". A deal would combine Pan Am's strength on trans atlantic and South American routes with Northwest's expertise in the Pacific, where it is the biggest US carrier. Parent company NWA's res ponse made it clear Pan Am had already made its approach and that the airline was expecting an "all-cash" offer. Pan Am's backers include investment bankers Prudential Bache, the Airlie Group, and Texan oil entrepreneurs Sid and Lee Bass. NWA has arranged a "truce" with hostile bidder Marvin Davis following the exchange of lawsuits, but his initial $2-7 billion offer seems unlikely to succeed since NWA's share value has grown in recent weeks. Ironically, Pan Am's massive losses could attract NWA. The accumulated losses could be carried forward to cut drastically the combined airline's tax liability for several years. Northwest (left) might welcome a friendly Pan Am bid CIA "knows identity of Lockerbie bombers" diately after the USS Vincennes mistakenly shot down an Iran Air Airbus A300. The intention was to find a method of taking revenge against the USA. The terrorist group set about finding American women who had Palestinian boyfriends, with the intention of using one as the unwitting carrier of the radio/ cassette player in which the bomb was planted. The US Central Intelligence Agency knows who arranged placement of the bomb which blew up a Pan American 747 over Lockerbie, Scotland, last December, but does not yet have the evidence for a conviction. A leaked report claims Iran hired a Damascus-based radical group, the Popular Front for the Liberation of Palestine, imme- Deliveries of the Shorts Tucano are behind schedule, with only 19 delivered to dc UK MoD admits costing error by Eric Beech The UK taxpayer has subsi dised shortcomings in the origi nal £125 million firm-priced contract for 130 Royal Air Force Tucano trainers from state-owned Shorts. The UK Ministry of Defence Procurement Executive has admitted to the Commons Defence Committee that its original specifications could have been clearer and that it under-estimated the risks involved in re-engining the Embraer Tucano. The MoD's director-general aircraft, David Jones, told the Committee that at the time of inviting best and final bids, the specification was redefined so that a maximum usable speed of 240kt could be sought. Jones admitted that, "We were not as clear as we should have been in originally defining what we meant by 240kt maximum speed at sea level." In response to this change, Shorts decided to offer fresh proposals with a re-engined Tucano. The MoD assessed this re- engining as a low-risk proposal although the aircraft could no longer be considered an off-the- shelf purchase. In the end, 80 per cent of the Tucano had to be redesigned to accommodate the more powerful 1,100 s.h.p. Garrett TPE331-12B turbo- "Wrongly loaded" Beecl No warning was given when a Swedish Beech 99, on a normal good-weather approach to Oskarshamn Airport, suddenly entered a steep descent on short finals and crashed, killing all 16 people on board instantly. A preliminary report blames load ing which put the centre of gravity aft of limits. The Beech 99 (SE-IRS) of Holmstrbm Flyg was being operated on a regular Stock- holm-Oskarshamn flight by two experienced pilots. Of the 15 passenger seats, 14 were occu pied. The aircraft was in radio contact with Oskarshamn tower, and the controller saw the entire approach and crash, which occurred shortly before lO.OOhr on May 8. Weather conditions and visibility were good, with high cloudbase, no turbulence, and a light cross- wind. Indications are that the aircraft had not encountered icing conditions during its flight, and that both engines were operating at the time of the crash. While the aircraft was carry ing out a long straight-in approach, reaching a height above touchdown of about 30-60m, it pitched nose-up, appeared to stall, and descended steeply, impacting with the ground about 300m from the runway. Incorrect loading is blamed, although the airline thought it had carried out loading accord ing to Beech instructions. Holmstrom's stability calcula tions assumed standard weights 2 FLIGHT INTERNATIONAL, 20 May 1989
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