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Aviation History
1995
1995 - 2616.PDF
USAir heads for profit Schofield: leaving on a high note RAMON LOPEZ/WASHINGTON DC USAIR HAS surprised analysts with an upbeat forecast that it will end the year with its first prof its since 1988. Over the past six years, die carrier has built up losses of more than $3 billion USAir ended die first half of this year showing a small profit after putting in a strong performance in the second quarter. The US carrier says that it expects the turnaround to earn' through to the third quar ter and, barring any unforeseen pitfalls, to leave it showing a full- year profit. USAir lost another S685 million in 1994 after paying for restructuring. Traffic and yields have been stronger than anticipated, says Seth Schofield, USAir chairman, explaining the optimism. "The rev enue trend that began earlier this year has continued through the summer. We're also seeing the benefits of our cost reductions reflected in lower than expected unit cost increases despite the fact that we reduced our capacity in the latter part of 1995," he says. USAir is still looking for addi tional labour savings, but recently abandoned efforts to win $2.5 bil lion in union concessions over the next five years. It plans instead to negotiate cuts in upcoming con tract talks. The better financial news coin cides with the announcement that Schofield will stand down after 38 years with USAir once a special search committee has identified a successor. Schofield says that his work as chairman and chief execu tive "...sets the stage for continued improvement and constructive change under new leadership". • llyushin sets prices for stretch 11-76 PRICES HAVE been revealed for the Ilyushin 11-114 64- seat twin turboprop and the I1-76MF stretched four-jet cargo aircraft. Speaking at the Moscow air show in August, Genrikhh Novozhilov, head of the Ilyushin design bureaux, . and Vasili Zhuravlev, general director of the Tashkent aircraft factory, revealed that the II-114 would cost $7 mil lion for CIS airlines and $10 mil lion for foreign carriers. Zhuravlev adds that two II-114s have begun pre-certification service with Uzbekistan Airways. The cost of the I1-76MF is being set at $30-35 million in equivalent rouble prices. At the air show, Russian defence minis ter Pavel Gratchen announced that two of the stretched cargo aircraft would be produced for the air force within the 1996 budget and that others would follow later. • Maintenance rates hit SASCO SINGAPORE Technologies Aerospace (STAe) is urgently looking at ways of reviving its sub sidiary maintenance company, Singapore Aviation Services (SASCO), after suffering a large loss in the first six months of the year. STAe made a net loss of SS49 million ($34 million) compared with a small S$12 million profit a year ago. The result was largely because of problems at SASCO, which lost nearly S$18 million, as well as a massive write-down on obsolete and excess military spares. The maintenance company puts its poor performance down to worldwide overcapacity and low work rates. This was further aggra vated by the strength of the Singapore dollar and higher oper ating costs for its new two-bay hangar at Changi International Airport. Maintenance rates are now about $35-37 per man-hour, well below SASCO's estimated $43 breakeven point. The company still has to find about six weeks' work to fill capacity over the rest of this year. "Their main problem is their lack of a captive audience," says a local financial analyst. SASCO relies totally on third-party work and faces strong competition, both locally from Singapore Airlines' engineering operation, and region ally from a growing number of new maintenance and overhaul centres. Industry sources suggest that SASCO has approached potential new investors, including Swire Pacific's Hong Kong Aircraft Engineering. SASCO denies that it is looking for new partners, but admits that it is hoping to lower costs by expanding overseas. A pro posed Chinese joint venture — Shenzhen Aircraft Maintenance and Engineering — recently col lapsed after failing to win approval. Another planned joint venture on the Indonesian Island of Batam is still waiting to get off the ground. SASCO is also pushing to broaden its capabilities beyond specialising in Boeing 747 section 41 work, to include pylon replace ment and full C and D-checks. It is planning to market its capabilities jointly with STAe's US subsidiary, Mobile Aerospace Engineering, in an attempt to secure more work from North American carriers. • BUSINESS NEWS IN BRIEF • AEROMEXICO PROFIT Aeromexico has reported net profits of $98 million for the second quarter of 1995, turn ing around a loss of $33 mil lion. The carrier says that the improvement came because it held down costs, increased sales and benefited from the stronger Mexican peso. Aeromexico has cut its fleet by seven aircraft and its workforce by 600. US opera tions grew strongly, with a 17% increase in revenue-pas senger kilometres over the same period in 1994. • AIRTRAN SPIN-OFF AirTran shareholders have approved the spin-off of the company's fast-growing AirTran Airways (ATA) char ter subsidiary. Formed in October 1994 with two Boeing 737-200s, Orlando, Florida-based ATA will oper ate eight 737-200s by the end of 1995. AirTran also owns Meseba. • DASA BUY-OUT In a state-supported deal to preserve jobs, Daimler-Benz Aerospace (DASA) has hand ed over part of its former Munich-Neuaubing produc tion site to a company formed by ex-DASA employees. The new company, Advanced Integral Structures (ADIS), has taken over 40% of the original site which was threatened with closure by DASA's 1993 restructuring plan. It will save 300 of the plant's former workforce of 1,100. DASA says that it has guaranteed ADIS contracts to supply plastic components until 1998. • DOWTYSALE TI Group has sold Dowty Aerospace's ram-air-turbine product line to Sundstrand for £5.5 million ($8.5 mil lion) in cash. The sale includes manufacturing equipment and related repair and overhaul activities in the UK and USA. FLIGHT INTERNATIONAL 13 - 19 September 1995 23
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