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Aviation History
1990
1990 - 3396.PDF
H EADLINES Stage II surplus sees lease market head for shakeout German combat tests for MiG-29 The German Air Force's spe cial test and evaluation unit, Erprobungsstelle 61 (EPG- 61), is conducting a series of combat evaluation flights against former East German Air Force (Luftstreitkrafte-LSK) MiG-29 Fulcrums. The outcome of the tests may lead to the type's retention in the new Luft waffe's inventory, (see p.13) The MiG-29s are being flown by LSK pilots and have had a series of mock combats against German Air Force Tornadoes and F-4F Phantoms. EPG-61, which several years ago evaluated former Egyptian Air Force Sukhoi Su-22 Fitters, says the results of the MiG flights are classified and that no other NATO fighters took part. EPG-61 may also evaluate other Soviet-built combat air craft. The results of the combat evaluation, including the MiG's strong and weak points, are likely to be passed on to the RAF, USAF and Saudi forces presently facing Iraqi Air Force MiG-29 Fulcrums. D Marconi rad; Thailand has ordered an air defence system from GEC Marconi involving two Martello mobile air-defence early warn ing radar systems. The radar deal is understood to be linked with the second part of a three-phase Thai pro gramme to update the Royal Thai Air Defense System, which is estimated will cost more than $200 million. The update programme en tails the modernisation of the radar network of the Royal Thai Air Force and the command, control and communications system. Sources indicate that the deal differs from the sale of two Martello radars to Malaysia ear lier this year, (Flight Interna tional, 24-30 January) in that Thailand has less of a require ment for a mobile support infra structure for the radars.Delivery of the system is expected to take BY JOHN BAILEY IN ACAPULCO The aircraft leasing industry is heading for a major shake-out as economic reces sion and uncertainty in the air line business take hold, accord ing to the head of International Lease Finance (ILFC). Steven Udvar-Hazy, president of the Los Angeles-based lessor, has warned that a surplus of early Stage II aircraft is develop ing, which will force down the residual values on which oper ating leases and sale/leaseback deals are calculated. Commercial banks are be coming increasingly wary of fi nancing these deals, with the result that many smaller leasing companies will go bankrupt over the next few years, says Hazy. Only 1% of the world fleet has been retired during the last five years, against an historical place in two years. Meanwhile GEC Marconi's Esams subsidiary has won a contract to develop the com mand, control, communica tions, and intelligence system (C3I) for the Royal Malaysian average of 4% per year (375 aircraft a year, at the current fleet size). Hazy says: "Before 1991 ends, leasing companies will have more aircraft in storage as non- earning assets than the total number of aircraft operated by American Airlines". There will also be a "dramatic decline" in the number of sale/leaseback deals, because "...the commer cial lending community will take a more conservative view of residual values". Speaking at last week's Avia tion Marketing transport aircraft marketing symposium in Mex ico, Hazy said: "The leasing industry is going to go through a shake-out, just as the airlines went through a shake-out in the early 1980s, and will do again in 1990/91". Although soaring aircraft re siduals made lessors "look smart" during the 1980s, Hazy predicts many casualties during Armed Forces. It is the second contract to be awarded after the UK-Malaysia governmenr-to- government memorandum of understanding signed in Sep tember 1988. The first was the order for the Martello radars. • the early 1990s, particularly holders of early stage II aircraft and brokers who have specu lated excessively on new aircraft delivery positions. Hazy is still confident, how ever, in the future of the "mega- lessors", which he claims have assisted the manufacturers by offering the airlines alternative sources of financing. He claims that more than 50% of the new aircraft delivered during the last nine months have had some form of lease financing atta che.d, He says: "Obviously, the airlines are looking for the off- balance-sheet method, because of the banks' reluctance to get involved". With airlines having more than $100 billion of orders out standing through the rest of the decade, Hazy estimates that around $30 billion will be re quired in progress payments be fore these aircraft are delivered, although major airlines typically pay much less than 30% in advances. Hazy's other predictions in clude generally higher leasing rates for new aircraft — due to higher aircraft prices, uncertain residuals, and a growing num ber of defaults on leases — which will force lessors and banks to insert more "cushion ing" in their deals. Stage II lessors will also try to enter the stage III market by "...paying inflated prices for their stage III aircraft", he says. "US, European and Japanese banks are going to become less active and less agressive in com mercial aircraft lending". • NEWS IN BRIEF VIETNAMESE AIRBUS Vietnam Airlines has cancelled plans to buy two Airbus A310s because of a US trade embargo on the coun try, a Vietnamese Govern ment official has said in Hanoi. The A310 uses US engines. Thais become latest South East Asian customer for Martello ir system for Thailand a FLIGHT INTERNATIONAL 14 - 20 November, 1990
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