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Aviation History
1993
1993 - 0063.PDF
AIR TRANSPORT JAL defers 747s as losses grow BY JOHN BAILEY IN SINGAPORE J Tapan Airlines (JAL) is to defer | deliveries of at least 25 Boeing 47-400s beyond 1998, in the face of a forecast pre-tax loss of ¥50 billion ($405 million) for the year ending 31 March. The deferrals are part of a new cost-cutting package, which should help to slash JAL's spending by ¥600 billion over the next four years. It extends a ¥300 billion savings programme announced in June 1992, after JAL revealed pre-tax losses of ¥6 billion (¥2.95 billion net) for fiscal year 1991 (Flight Inter national, 10-16 June, 1992). The new package, which in cludes some route restructuring, staff layoffs and a ¥200 billion cut in planned investment, has been drawn up after what one official describes as "...a summer of discontent for JAL's corporate planners". Traffic and revenue growth predicted in the last edi tion of the company's rolling five-year plan failed to material ise, leading to the ¥29 billion net-loss forecast in October 1992, which is unchanged. The 25 Boeing 747-400s are part of a previously unan nounced backlog of 26 firm or ders and 29 options held by JAL, the largest customer for the type. The carrier already has 25 in service, and will take delivery of a further 15 by March 1998 (down from 25), along with ten Boeing 777s, up to five 767s and ten McDonnell Douglas MD-lls. The 767 contract (for three firm orders and two options) was signed in December 1992 and represents a "downsizing" of some of the planned 747-400 capacity. Some later 747-400 or ders and options may be switched to the smaller aircraft, depending on how traffic de mand picks up. JAL says that if the promised cost reductions are effective, JAL says that increased traffic de mand of around 10% on its domestic routes and 5% overseas should allow it to break even during FY93, and return to profit in FY94. The airline fore sees a limited global recovery early in 1994, but says there will be little gen uine growth for Japan's airlines before the open ing of Osaka's new Kansai Air port later in the same year. The other ele ments of the package include increasing its share of Japan's domestic market to "at least one- third" over the next five years, with domestic sales accounting for 40% of growth markets like China will JAL's total revenue. Key domes- be boosted. The sum goes donw on JAL 747-400 orders tic routes will have additional frequencies, and new routes will be added. In Europe, JAL will concen trate on providing non-stop services to key gateways, with code-sharing to onward points. Capacity will be reduced across the Pacific, with the Tokyo-Los Angeles service being cut from 14 to nine flights a week, al though regional services to key JAL also plans to increase the number of non-Japanese flight attendants to around 30%, and to hire more expatriate pilots, taking 100 three-man crews by the end of FY94. The airline will also scale back three airport- related projects, including a new operations centre at Tokyo's Narita, a maintenance hangar at Kansai, and investment in infor mation systems. D Conquest wins Beech 1900 lawsuit US regional Conquest Airlines has settled all lawsuits relat ing to its operation of Beech 1900s, for a total gain of around $10 million. The Austin, Texas, airline filed the suits in 1991, alleging that Beech had misrep resented the actual costs of oper ating the 19-seat twin-turboprop. Conquest also alleged that Beech persuaded the start-up carrier to buy five 1900s, instead of leasing two aircraft as planned originally, and said that it later bought four more 1900s on Beech's recommendation. The manufacturer later settled, agree ing to buy back the nine aircraft for $8.7 million. The airline also alleged that Beech failed to address mainte nance problems, and filed suits against engine manufacturer Pratt & Whitney Canada and fuel-control supplier Woodward Governor. Woodward settled for $400,000 and Pratt & Whitney Canada, its parent United Tech nologies and affiliates have set tled for $1.1 million. Conquest stopped flying the Beech 1900 in October 1991 and now operates a fleet of leased Fairchild Metro III 19-seaters. "We are pleased to have con cluded all legal proceedings. We can now concentrate all our efforts on operating, improving and expanding our airline serv ice and achieving profitability," says chairman Victor Rivas. • Stateswest Airlines of Phoe nix, Arizona, meanwhile, is dis cussing with Pratt & Whitney Canada similar claims of defec tive engine components, this time on leased Beech 1900s. The regional carrier listed flying hours lost because of engine problems among reasons for fil ing for Chapter 11 bankruptcy protection in December 1992. • Britannia orders seven Boeing 757s Britannia Airways, the UK's second-largest airline, has become Boeing's first announced customer of 1993 with a $275 million order for seven, ex tended-range-capable Boeing 757-204s. The charter airline is trading in its remaining nine owned 737-204s, the disposal of which was an important element in the deal. The carrier values the con tract at $375 million. Rolls- Royce says that the RB.211- 535E4 engine order is worth $64 million. Britannia had consid ered buying eight Airbus A320s. The new aircraft are sched uled to be delivered by May 1994 (the 737s being released in the same period) and are in addition to seven 757s to be delivered shortly. Two 757s will be obtained on operating leases from International Lease Fi nance (which is co-operating in the 737 trade-in), with the bal ance from Boeing on various finance leases. The "fleet-modernisation pro gramme" will leave Britannia with fewer aircraft and few em ployees — about 560 people are losing their jobs. Around 100 people, including about 40 ground engineers, will be offered jobs with Servisair, which Bri tannia has contracted for ground-handling services. Around 160 pilots and a further 240 engineers and administra tion staff comprise the balance. Britannia says that it will no longer operate to five of its 180 destinations, for technical rea sons. These include Madeira and two on Greek islands. • NEWS IN BRIEF BOURAQ 748 CRASHES A Hawker-Siddeley British Aerospace 748 operated by Indonesia's Bouraq Airlines crashed shortly after take-off from Surabaya on 9 January, killing 17 people. The air craft, with 39 passengers and crew on board, apparently suffered an engine failure, and crashed 2km from the airport, in eastern Java. The dead in cluded four of the five crew. FLIGHT INTERNATIONAL 20 - 26 January, 1993 9
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