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Aviation History
1991
1991 - 0123.PDF
BUSINESS Sale of engineering arm gives Dan-Air \ital cash injection Dan-Air Engineering sold to FLS Group BY ERIC BEECH FLS Aerospace, part of Den mark's largest company, the FLS Group, has purchased Lon don Gatwick-based Dan-Air En gineering from Davies & New man Holdings for £27.5 million. The sale of Dan-Air's subsidi ary is the first phase of the airline's rescue plan under new chairman David James. Following the acquisition, FLS' annual sales for this sector will top £100 million, making the company Europe's largest independent provider of aircraft maintenance services. Dan-Air?" Chairman David James describes the sale as "...a critical deal for the airline. It will reduce our bank debt con siderably." He adds that the review of Dan-Air operations showed the engineering busi ness had become too large, re marking: "Dan-Air is now an airline and only an airline". Dan-Air Engineering will re tain its name and continue as a separate business with FLS Aer ospace as the parent company. Dan-Air has agreed to have its aircraft maintained by its former subsidiary for the next three years. FLS plans to retain all Dan-Air Engineering's mainte nance bases and its 1,600 staff. Under the terms of the agree ment, the final price for Dan-Air Engineering will be subject to adjustment following a post- completion audit of the com pany's net asset value. Dan-Air's recovery strategy now calls for maximising reve nue, on its route network and a programme of aircraft replace ment. It has already sold nine aircraft from its charter fleet, thus reducing it to 18. Accord ing to James, this will still leave the airline with capacity to carry the two million passengers it expects next summer. James plans to increase busi ness class to all its European destinations. He stresses that the review of air routes and frequencies will continue so as to maximise incomes. He will not be drawn on aircraft re placement decisions but says that options to swop aircraft are being investigated. • De Havilland Boeing Canada's de Havilland division is laying off up to 300 workers, in a move the Canadian Auto Workers (CAW) union believes is linked to the upcoming sale of the company to Avions de Transport Regional (ATR), a consortium of Aero spatiale and Aeritalia. De Havilland says the lay-offs are "...part of a long-term busi ness plan which has been in place for a couple of years". That plan has "...recently been impacted by a number of is sues" — the slowdown in re gional aviation and airline busi ness, the recession and rising fuel prices. Also, de Havilland has increased productivity and has reduced hours required to build its aircraft. CAW believes the cuts are the result of demands made by ATR. Jerry Dias, president of the local CAW branch, says that "...one of the terms of the sale is that Boeing is to streamline the operations". He says ATR intends to reduce de Havilland's Thai Airways International has announced a pre-tax profit of Bt6,754 million ($270 million) for the year ending 30 September, 1990. This is Thai's second-highest figure recorded, the previous year showing a pre-tax profit of Bt7,420 million. The airline says that it would have beaten its record but the last two months of trading were adversely af fected by the Gulf crisis fuel- price rise and the general down turn in the world's economy. Total revenue in 1989/90 rose Howden buys slice Airscrew Howden has ac quired Frazer-Nash Defence Systems for an undisclosed sum, following Frazer-Nash's ,entry into receivership. '• , :. The acquisition effectively ends any hope of Frazer-Nash Being acquired as a whole'—the company designs a range of automated equipment such as post-office sorting systems. Re- axes staff workforce of 5,276 by 40% and "...they don't want to be the bad guys coming in and laying everybody off. Dias says de Havilland is starting to lay off engineers and other skilled workers. "Once the sale is consummated, the research and development capa bility of de Havilland is going to be gone. They're starting to put the pieces of the puzzle inplace to do two things: one, maintain the production lines as they exist; and two, once the Dash-8 Series 100 and Series 300 sales dry up, we're going to become no more than a parts supplier for the ATR consortium," he claims. By 2 January de Havilland had delivered 206 Series 100s and 35 Series 300s, and has a backlog of 110 firm orders (40 Series 100 and 70 Series 300). Plans for a 68- to 70-seat 400 Series have been put on hold, de Havilland says any decision to go ahead with it will be up to the new owners. • wn Thai profits by 11.9% to Bt48,615 million compared with Bt43,107 million the previous year. Thai flew 8.3 million passengers on 51,233 flights, up 12.5% and 11.43% respectively. Cargo traffic was up 38%, at 834.2 million tonne- kilometres and Thai entered the top 20 freight carriers for the first time. Other Thai highlights in the year were fleet expansion by 14 aircraft (six leased), becoming a member of IATA and joining the Amadeus international res ervations system. • of Frazer-Nash ceiver Touche Ross was called in at the end of November. Howden is understood to have bought Frazer-Nash De fence Systems in late December, laying off the bulk of the staff. Defence Systems was best known for its production of the common rail launcher unit, which is being proposed for the European Fighter Aircraft. • Europeans convey more commuters European commuter opera tors continue to increase their business at a rate "signifi cantly higher than the industry norm of 14%", says the Euro pean Regional Airlines Associa tion (ERA). The 26 ERA member airlines carried 7,933,000 passengers in the first nine months of 1990 within a total of 13,858,000 passengers flown by 44 Euro pean regional carriers. ERA director Mike Ambrose predicts that fourth-quarter re sults will be affected by events in the Gulf and related increases in fuel costs. Latest results show that average sector distance flown and sector time are about 385km and lh, respectively. Av erage aircraft capacity has grown to 38 seats. • Fuel prices hold d( FLIGHT INTERNATIONAL 16 - 22 January, 1991 13
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