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Aviation History
1995
1995 - 1514.PDF
EDITORIAL UK Editorial Enquiries Editorial Fax Editor Allan Winn Editor's PA Lisa Jenkins Deputy Editor Forbes Mutch News Editor Andrew Chuter Operations/Safety Editor David Learmount Business Editor Kevin O'Toole Commercial Aviation Editor Kieran Daly Defence Aviation Editor Douglas Barrie Aviation Research Editor Jennifer Pite Editorial Assistant Kate Sarsfield Production Editor Chris Thornton Art Editor Alexis Rendell Layout Sub-Editor Annabel Wells Technical Artist Tim Hall Technical Artist David Hatchard Technical Artist Giuseppe Picarella Spaceflight Correspondent Tim Furniss Photographer (Europe) Mark Wagner EUROPE/MIDDLE EAST European Editor Julian Moxon +44(181)652 3842 444(181)6523840 +44(181)652 3882 +44(181)652 3882 +44(181)652 3852 +44(181)652 3843 +44(181)652 3845 +44(181)6523835 +44(181)652 3837 +44(181)652 3834 +44(181)652 3847 +44(181)652 3842 +44(181)652 3850 +44(181)652 3828 +44(181)652 3848 +44(181)6528047 +44(181)652 8047 +44(181)652 8054 +44(1237)471960 +44(181)944 5225 +33(1)46 294761 (Fax+33 (1)46 29 47 49) Munich Correspondent Andrzej Jeziorski +49 (89) 6891041 [Fax+49 (89) 6891045] Paris Correspondent Gilbert Sedbon +33 (1) 48 25 52 61 Israel Correspondent Arie Egozi +972 (3) 9671155 Moscow Correspondent +7(095)3934717 Alexander Velovich [Fax +7 (095) 393 4717] AMERICAS American Editor Graham Warwick +1 (404) 587 2927 [Fax+1(404) 5941534] Washington Correspondent Ramon Lopez +1 (703) 836 7443 [Fax+1(703) 836 8344] West Coast Correspondent Guy Norris +1 (714) 252 8971 [Fax+1(714) 252 8972] ASIA PACIFIC Asian Editor (Singapore) Paul Lewis Australian Correspondent Paul Phelan +65226 3188 [Fax+65 2271769) +61(70)532 791 [Fax+61 (70) 533 003) +44(181)6523315 +44(181)652 8981 +44(181)6523319 +44(181)652 3892 DISPLAY ADVERTISEMENT SALES UK and EUROPE Display Advertising Enquiries Display Advertising Fax Group Advertisement Director Trevor Parker IRELAND, ISRAEL, UK Deputy Advertisement Manager Nick Wilcox EAST EUROPE, GERMANY, SCANDINAVIA, UK Senior Area Manager Robin Gordon +44 (181) 652 4998 NETHERLANDS, PORTUGAL, SPAIN, UK Area Manager Janice Lowe +44 (181) 652 3316 Secretary Lisa Devlin +44(181)652 3315 Advertisement Production Display/Classified+44 (181) 652 3267 Howard Mason FRANCE Sales Director France Pierre Mussard ITALY Representative Romano Ferrario NORTH AMERICA Vice-president US Sales John Tidy Fax Sales Director East Coast Robert Hancock Sales Director Mid-West & Canada Gene Glendinning Traffic Manager Debbie Kolb AFRICA Nick Wilcox MIDDLE EAST Robin Gordon JAPAN Representative Shoichi Maruyama ASIA, AUSTRALIA Singapore Account Manager Karen Kwan +33(1)46294629 [Fax +33 (1)40 93 93 37] +39(2)66034435 [Fax+39 (2) 6603 4367] +1(714)7561057 [Fax+1(714) 756 2514] +1(703)836 7444 [Fax+1(703) 836 7446] +1 (708) 304 5588 (Fax+1(708) 304 9559] +1(212)5455376 [Fax+1(212) 679 9455] +44(181)652 3892 +44(181)6524998 +81(3)32342161 [Fax+81 (3) 32341143] CLASSIFIED & RECRUITMENT +65226 3188 [Fax+65 223 6960] Advertisement Manager Gareth Pask International Sales Executives Mo Buttivant Judith Slann Classified Sales Executives Valerie Hall Liz Houghton Colin Hampden Simon Lees Enquiries Classified USA Gail Tavelman Classified Asia/Pacific Karen Kwan Publisher Gavin Howe +44(181)6524814 +44(181)770 3032 +44(181)770 3011 +44(181)7703010 +44(181)7703002 +44(181)7703030 +44(181)7703027 +44(181)6616373 +1(212)5455403 +65226 3188 +44(181)652 3675 DOLLAR DISTRESS Even its most ardent supporters would have to admit that the US dollar's spectacular slide against most of the world's leading currencies has left it looking decidedly less solid of late. For the world's aerospace and airline industries, at least those outside the USA, it is a further uncertainty in an already uncertain world, one they could well do without. No-one has yet seriously suggested that the world ditch the US dollar as the international standard for civil aircraft pric ing, but should they? Should aviation follow other international industries and price in a wider mix of yen, Deutschemarks or even ECUs? True, the issue is a complex one. There are sound reasons for aircraft transactions to be priced in a universal currency. Aircraft are highly mobile assets, moving around the globe with scant regard for national borders or local currencies. Their financing too is a truly international affair. In this environment, the idea of settling on a single currency has suited manufacturers, airlines and financiers alike, bringing a mea sure of stability and certainty to deals wherev er they happen around the world. The US dollar was the natural choice for that standard. Over more than half a century, the dollar has established itself as the bench mark currency for world trade. For aviation the arguments are even more compelling, with the USA historically accounting for more than two thirds of jet airliner produc tion and the lion's share of consumption. Today, the blunt fact is that few of these assumptions are as sound as they once were, and are likely to become shakier still as the industry moves into the next century. The US dollar is no longer stable, US air lines no longer dominate new aircraft business, and the US industry no longer controls world airliner manufacture in the way it once did. If Europe's Airbus Industrie realises its ambitions it could be on the way towards win ning a 50% share of new jet airliner orders some time in the next 10 years. European manufacturers have been making increasingly bitter complaints about the dis- "Should aviation follow other international industries and price in a wider mix of yen, Deutschemarks or even ECUs?" advantages that they face competing with transatlantic rivals, following the collapse of the dollar. Daimler-Benz Aerospace (DASA) warns that it may be forced to move whole swathes of production out of Germany and the Netherlands unless the dollar makes up some of its lost ground against the Deutschemark and guilder. Hopes of returning to profit have been put on hold. Aerospatiale has fol lowed suit with dire warnings that its gains in productivity and efficiency are simply being swallowed up by the currency gap. Calls for state inter vention have fol lowed, raising the prospect that some of the good work towards cutting the ties between government and industry may be undone. It is only three years since Germany agreed to stop underwriting DASA's dollar losses. Europe is not alone. Japanese industry is also struggling to make economic sense of production ventures, many of them with Boeing, which were begun before the dollar slid 20% against the yen. The fact that non-US manufacturers are dis advantaged is not itself a cause for undue con cern. US industry could rightly argue that these are facts of life. Corporate treasury departments may have to work harder, but so be it. What is less easy to dismiss, is the potential uncertainties that a wildly fluctuating dollar is having on the customer. Technically, airlines should benefit from cheaper aircraft if their local currency rises against the dollar, but that is not how the world works. In reality, airlines are forced to hedge against fluctuations in the dollar and as the Japanese carriers have shown, can lose vast amounts if such bets go wrong. Even if the bets go right, that is not the point. The real value of dollar pricing has lain in the fact that it has provided the certainty and stability which any business needs in order to thrive. If that stability can no longer be guar anteed, and the risks now outvalue the bene fits, then perhaps it is time for other currencies to be given a chance. • FLIGHT INTERNATIONAL 31 May - 6 June 1995 3
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