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Aviation History
1993
1993 - 1642.PDF
AIR TRANSPORT All-clear expected for Aer Lingus re-shape BY KEVIN O'TOOLE Aer Lingus is expected to get broad approval for its survival plan when the Irish Government discusses the issue on 30 June. A question mark still hangs over controversial proposals to avoid the Shannon stop-over, however. The plan, which was pre sented to the Government early in June, outlines proposals to shave IR£50 million ($72 mil lion) off the state-run airline's costs in an attempt to stem heavy losses. The bulk of the savings, around IR£35 million, will come from the loss of 1,280 jobs from the airline's 5,600- strong workforce. Another 250 would be lost from the 1,500 employed at the TEAM Aer Lingus maintenance subsidiary. A re-shaping of the group's operations into four new divi sions is also included. Euro pean regional operations will continue under the Aer Lingus name, but long-haul North American operations have been separated into a new unit to be based at Shannon. The airline's fleet of 747- 100s would be based at Shan non, but would be flown to the USA via Dublin. Crews may also be based there. In theory, the Shannon stop over would therefore be re placed by a Dublin stop-over, although in reality the route would be Dublin-New York non-stop and, more impor tantly, it would appear that FAA claims AAS is back on track The US Federal Aviation Administration believes that it has regained control of the troubled $5 billion Ad vanced Automation System (AAS), after imposing strict surveillance on contractor IBM. Acting FAA administrator Jo seph Del Balzo says: "AAS is back on track. I think it is back on a schedule we have confi dence in. We now have a firm handle on the cost to complete." That was not so earlier this year, when the FAA stepped in to halt additional delays in fielding the critical air-traffic- control (ATC) modernisation system under development by IBM. Considered the "corner stone" of the FAA's Capital Investment Plan, the AAS con tract was awarded in 1988. Since then, IBM has struggled with development of the Initial Sector Suite System (ISSS) — the new ATC workstations. Two years ago, the FAA and IBM modified the AAS con tract, which resulted in a 19- month delay for the ISSS. In November 1992, IBM told the FAA that the project had slipped an additional 14 months. Software-development problems were blamed for much of the slippage. IBM was ordered to submit a recovery plan to the FAA, but Del Balzo says that the FAA is also to blame for the AAS problems. "We did not exercise sufficient, continuing top- management focus on the pro gramme and we took far too long to respond to technical issues or problems," he says. Del Balzo says that IBM has passed a major milestone re garding software check-out and that the FAA now has "confi dence" in the 1.5 million lines of AAS computer code. He adds that the FAA is on track for an operational system in Seattle in October 1996. The AAS problems resulted from cost, schedule and performance requirements. "We at the FAA are very conservative. Given the choice between the three requirements, we always go for maximum performance. We just hung on to maximum per formance a lot longer than we should have," he explains. • Traffic loss to UK helps put Aer Lingus in intensive care way on computer ticket reservation systems in the USA. The airline hopes that the switch will appease the Shan non political lobby, as well as stopping the drift of passengers away from its North Atlantic services. In the past two years, the proportion of US-Irish pas senger traffic travelling via the UK has risen from 40% to 60%. Aer Lingus also wants to form a low-cost Express opera tion, which it says will be used to exploit "niche opportuni ties". One clear target will be to compete with the low-cost op erators such as Ryanair, which have been driving down fares on routes from Dublin to the UK. The Express operation could be used to feed traffic from regional UK airports into the transatlantic operation. Airline services such as ca tering and handling would be hived off into a fourth division and operated as separate cost centres. The aim is not only to drive down costs for the parent airline, but also to expand third-party work. TEAM Aer Lingus and Air- motive will remain within the group, but other subsidiaries, including the Copthorne hotel chain which has been a main stay profit-maker, will be sold. The disposals will take place under a "managed programme" over the next two years says an official, rejecting speculation of fire sales. The airline is also badly in need of a new injection of cash from the state. The Irish Gov ernment has agreed in princi ple to provide IR£175 million in new capital, but has made it clear that the airline must first act to stem its losses. It brought in entrepreneur Bernie Cahill as chairman in March, to see the restructuring through. Aer Lingus expects to report a loss of more than IRQ 00 million for its year to March 1992 after writing off around IR£40 million for its remaining share in the troubled GPA leas ing group. The cost-cutting programme is designed to bring the group back to profit by March 1995. The new capital would help the airline with renewal of its ageing transatlantic fleet after 1996, with the acquisition of four 747-200/300s. Although the Irish Govern ment met trade unions on 21 June to hear concerns over the planned redundancies, and has encouraged further dialogue between Aer Lingus manage ment and workers, it is ex pected to agree broadly to the re-organsisation plan. D NEWS IN BRIEF EMB-145 APU Embraer has selected Auxil iary Power International's APS 500 as the standard auxiliary power unit for the EMB-145. An earlier version of the APS 500 is used in the EMB-120 Brasilia. Embraer plans to build more than 400 EMB- 145s by 2010. BRAVIA PRECISION Precision Standard's Pemco Aeroplex subsidiary has formed a new venture with Bravia for the conversion of the passenger Tupolev Tu-204 to freighter, quick change and combi layouts. Conversions of either Rolls-Royce or Perm powered versions will take place at Ulyanovsk, Russia. FLIGHT INTERNATIONAL 30 June - 6 July, 1993 9
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