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Aviation History
1996
1996 - 1322.PDF
EBtikMkMk^t±.tkt^&MKfbMt±4^ NEWS IN BRIEF • SILKAIR PROFIT? SilkAir, the regional sub sidiary of Singapore Airlines, is hoping to make its first- ever profit in the current financial year to March 1997. Industry sources say that the airline cut its losses to around S$6 million ($4.3 million) over 1995/6, having produced a deficit of $27.5 million the year before. SilkAir has been working to cut costs by changing its aircraft fleet to smaller Boeing 737s and Fok- ker 70s and transferring un profitable routes to its parent. • EMBRAER PROFITS Embraer president Mauricio Botelho has declared that the company's privatisation is working after a much- improved set of first-quarter results. Revenues rose by 41% to $76 million, while losses fell back to $26 million. In the first quarter of 199 5 the company had racked up losses of $116 million. The institu tions which now own Embraer are to inject $115 million to reduce its $500 mil lion debt. Merger options are shaping up for Dassault and Aerospatiale JULIAN MOXON/PARIS DASSAULT AVIATION chair man Serge Dassault has pub licly rebuffed reports that he is against a merger with Aerospatiale and says that the talks are "on the right track". His remarks came as the French Government is moot ing the idea of nationalising Dassault to form a merger. French president Jacques Chirac has made it clear that he expects die merger to go through, setting a 30 June deadline for a study group to report on how it could be achieved. A source close to the talks confirms that".. .there will be something in two or three weeks, and we expect there will be a positive solution". Dassault says that he is talking only to the defence ministry and that he has still had no contact with Aerospatiale president Louis Gal- lois, whose resignation he has demanded as a merger condition. Dassault has yet to comment officially on the merger, but its chairman is known to be opposed to an alliance with the loss-making and overstaffed Aerospatiale. There is little overlap between the two in terms of products and their corporate structures are wide ly different. Dassault has already made cuts to become more com petitive, while Aerospatiale has yet to achieve many of its reforms. "Dassault is profitable, Aero spatiale has heavy losses. That makes the idea of a merger difficult to justify commercially," says an industry source. The French state controls 45.76% of Dassault through the Sogepa holding company, which also controls Aerospatiale. The Dassault family owns 49.9%, while the rest is publicly owned. One solution likely to be favoured by the Government is for the merger to take place under Sogepa. This would require the purchase of Dassault's stake, which, if assessed by its latest stock-market value of Fr530 ($103) per share, is worth around Fr5.4 billion. Dassault has said publicly that this figure ".. .is not a good indica tor" of the company's value, placing it closer to Frl 3 billion. Chirac, who is known to be close to the Dassault family, wants the merger to create his much-vaunted "aerospace hub" within the French industry. Some observers believe that he may be overtaken by events, since Dassault has already agreed on a fighter-aircraft alliance with British Aerospace, and Aerospatiale is moving towards mergers with Germany's Daimler-Benz Aero space and possibly other major European aerospace players. Any merger will be fraught with social problems resulting from the inevitable reduction of Aerospat iale's workforce necessary to create an efficient company. Dassault has already cut its numbers from 17,000 to just 9,000, but Aero spatiale remains saddled with 40,000 employees, which sources say will have to be cut by at least 10,000 to ensure that the alliance is competitive. "We're looking at a very difficult summer," says one source close to the industry. • CAL proposes to sell shares TAIWAN'S CHINA Aviation Development Foundation (CADF) is to sell around 16% of its holding in China Airlines (CAL) to private investors. The sale will reduce CADF's stake in the carrier to 62%. It also plans to launch a rights issue of 200 million shares. The issue is expected to raise NTS7 billion ($260 million), which will help towards financing the eight Boeing 747-400s ordered in May. CAL came close to trebling net profits for 1995, on the back of strong passenger-traffic growth, marking an early recovery from the setbacks it experienced in 1994. Sales totalled NTS47 billion, up by 9.2 % on 1994 figures, when the airline suffered a major financial setback from the Nagoya Airbus A300-600R crash and was hit by the slump in Taiwan's tourist traffic to mainland China via Hong Kong. The airline's net profits came in at over NT$1.2 billion for 1995, which were up strongly on 1994 returns, but which are still lagging behind the NT$3 billion or more profit which the group was making in the early 1990s. Passenger revenues leaped by 12%, running ahead of a 10% rise in traffic. Passenger numbers came close to 6.5 million. Cargo traffic also surged by nearly 15%, but rev enues grew by only 4.5% asdeclin- ingyields took their toll. • CAL has taken a 15% stake in the new CLK Airport Ground Handling company, which has just been awarded a ten-year licence to operate at Hong Kong's replace ment airport at Chek Lap Kok. Jardine Airport Services holds 80%, and a group of unidentified European airline investors have the remaining 5%. • End of the line for Tu-134s is likely as Maersk moves in Maersk emerges as winner in Estonia ACONSORTIUM headed by Denmark's Maersk Air has emerged as the winner of the race to take control of Estonian Airlines. Scandinavian Airlines System had battled to win the privatisation con test, to secure its grip on the Baltic. Maersk Air, together with Danish investment group Baltic Creco, is reported to be negotiating the final details of a bid to take over a 66% share in the Estonian carrier. The cost of the shares and fleet renewal is expected to be around EKr200 million ($16 million). Maersk has already said that it intends to return the carrier to prof its within the next two to three years and replace its remaining four Russian-built aircraft. Estonian, which lost EKr26 million in 1995, operates four Yakovlev Yak-40s, two Boeing 737-500s and some of its eight Tupolev Tu-134s. The Danish carrier is expected to open links between its Billund hub and Estonian capital Tallin, creat ing a hub for east-bound traffic. • 18 FLIGHT INTERNATIONAL 29 May - 4 June 1996
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