FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
1991
1991 - 1951.PDF
1 BUSINESS BWIA heads for independence Shutdown threat to Bet Shemet Israeli engine company Bet Shemesh faces closure because of budget cuts affecting Israeli Air Force contracts. The com pany says that only immediate and massive help from the Is raeli Government can save the company. Bet Shemesh is owned jointly by the Israeli Government (60%) and Pratt & Whitney (40%). The plant, near Jerusalem, was to make the Pratt & Whitney 1120 engine selected to power the Lavi, the Israeli-developed fighter cancelled in 1987. In 1989, the Israeli Govern ment covered most of the com pany's losses. A marketing effort produced orders worth $50 mil lion. The plant manufactures en gine parts and recently has been engaged mainly in upgrading the Pratt & Whitney F100 engine for air force F-15s and F-16s. Bet Shemesh received the ret rofit kits from Pratt & Whitney and installed them on the en gines during major maintenance. After installing kits on some engines, the air force decided to stop the retrofit programme be cause of lack of funds. "This was our main work in recent years. Without that work we are getting very fast to a point where we will have to close down the plant," says a company insider. The Israeli ministry of defence says that efforts are being made to help the company. "In spite of the severe budget problems we recently took a number of steps to ensure the continued opera tion of the plant," a ministry spokesman says. • Trinidad & Tobago (BWIA International) Airways — known as BWIA — is seeking a major international airline part ner, with the aim of achieving financial independence by 1993. The Government of Trinidad and Tobago, which has owned the airline since 1961, has re structured the board with a mandate to achieve profitability and to complete a strategic alli ance with a major partner by the end of this year. The Government is assuming or writing off $17.6 million of BWIA debt ?and liabilities and will invest $30.6 million in the BY FORBES MUTCH The downturn in worldwide airline traffic following the Gulf War has hit the 1990/1 results of the UK Civil Aviation Authority (CAA). Although the authority's turn over was a record £442 million, up 27% on the previous year, the after-tax profit increased by only £2.1 million to £13.1 mil lion, compared with £11 million 1989/90. Operating profit of £26 million was almost £4 million lower than budgeted. Presenting the CAA's annual report for the first time, new chairman Christopher Chataway admitted that the results repre sented "...a disappointing 6.8% return on capital". This falls short of the 8% figure agreed with the UK Government. airline from 1993. Additional restructuring will be discussed with partners. At least 10% of BWIA common equity will he sold to employees. Once a part nership has been established, the Government proposes to reduce its holding to a significant mi nority by placing additional shares privately. New chairman Joseph Esau aims to operate at a profit by the end of 1991. The Caribbean carrier is offering an established network, "...the highest market share on the routes it flies", domestic shuttle operations, and unused traffic rights to North The CAA is already reported to be an estimated £6 million down on projections for the first quarter of the current financial year and has approached the Government for an extra £58 million funding. Chataway has also warned that CAA charges will need to rise above the rate of'inflation if targets are to be met. By con trast, the CAA is proposing to restrict heavily the ability of airport operator BAA to raise charges (Flight International, 17- 23 July). , ':• Despite these disappointing results, however, the CAA in tends to ride out the storm by applying only minimum cost cutting. "It is essential," says Chataway, "that we avoid the mistakes of the '80s when, be- and South America and Europe. BWIA operates a fleet of four Lockheed L-l 011-500 TriStars and nine McDonnell Douglas MD-83s on more than 100 round trips a week. A third of the services are domestic; more than 20 serve the Caribbean and South America, 40 fly to destina tions in North America and eight times a week to Europe. The Trinidad & Tobago Gov ernment is negotiating with the ten other Caribbean govern ments, which hold shares in Leeward Islands Air Transport, to form a partnership or merge the operations. • cause of a drop in demand caused by the prevailing eco nomic situation, investment in both equipment and personnel was allowed to fall to inadequate levels." The CAA imposed a partial ban on external recruitment at the beginning of the year, but no cuts to staffing levels are ex pected and a commitment to investment in technology re mains a priority. Last year, £78.4 million was invested in new air traffic con trol equipment, an increase of £18 million on the previous year. Chataway believes that the de mand for air travel will soon resume its steady growth and says that "...the CAA will be prepared for that increase". • NEWS MTU TIE-UP MTU and Pratt & Whitney Canada (P&WC) have agreed to form a 50/50 joint venture to provide after sales support services for the Canadian company's existing and future engine families in Europe, the Middle East and Af- rica.operations are scheduled to start in the second half of 1992 at a site near Berlin. BRIEF RAYTHEON GROWS Raytheon's net profit rose to $151.8 million on sales of $2.35 billion in the second quarter of 199L During the same period last year, income amounted to $144.8 million on sales of $2.34 billion. Total order backlog stands at $8.56 billion. Results for the first six months show income at $285 million. Disappointing result forces CAA cash call CAA charges increase, but BAA fees at airports like Heathrow are held down FLIGHT INTERNATIONAL 24 - 30 July, 1991 13
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
