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Aviation History
1997
1997 - 0179.PDF
BUSINESS SEP rockets into Snecma JULIAN MOXON/PARIS SNECMA HAS completed the takeover of rocket engine and advanced materials venture Societe Europeen de Propulsion (SEP), which now becomes a wholly owned group subsidiary. SEP, in turn, will take over Snecma's brakes subsidiary, Messier-Bugatti, to cre- atewhat is claimed will be Europe's largest aviation and automobile braking company. The restructuring was first out lined in 1996 by new group presi dent Jean-Paul Bechat, who instituted an abrupt reversal of die strategy to return Snecma to its core aero-engine business (Flight International, 13 -19 November, 1996). Under his predecessor, Bernard Dufour, who was eventu ally forced to stand down, Snecma had been on course to sell its 51 % holding in SEP — the remainder was held by other Government agencies —and put Messier Bugatti into the hands of US manufacturer BFGoodrich. The SEP takeover comes at a time when the rocket-maker has revealed that despite a slight reduc tion in turnover to Fr5.03 billion ($1 billion), 1996 consolidated net profit will be up by 25%, to Frl59 million compared with 1995. The restructured braking sub sidiary will be have been created by the end of February, says Bechat, and will incorporate the activities of SEP subsidiar)' Carbone In dustries, which already supplies the advanced carbon-carbon materials for a new range of brakes devel- Snecma has absorbed SEP's engines oped by Messier-Bugatti for future Airbus Industrie aircraft. Bechat has also announced the creation of a new group services company through the merger of Snecma's own maintenance activi ties with those of its Sochata engine repair and overhaul subsidiary. The new Snecma Services has been formed primarily to take advantage of die increasing market for main taining the large number of CFM International CFM56 engines in die field. Bechat agrees that a deal widi Air France Industries, which also has a large CFM56 main tenance operation, "is an option", but he says that nothing concrete has been discussed. The restructuring comes as the group reports the first signs of an upturn in its fortunes. Bechat re veals that Snecnia, France's second largest aeronautics company, expe rienced a sales rise of 4% in 1996 and is predicting a further 20% growth for this year as the recovery in engine orders begins to take hold. That would leave the group showing sales of around Fr22 bil lion ($4.1 billion). Group sales fell by 2 5% over the four years of recession, while the engine business, which accounts for almost half of the group, had a 40% fall between 1991 and 1995. Bechat says that all the group busi nesses, except for the engine com ponent, will "...either break even or go into profit" over the year. The military business continues to decline, however. It accounted for less than 29% of sales in 1996 and may be as low as 20% in 1997, says Bechat. He adds that Snecma is "ready to participate" in the funding of engines for an initial batch of Dassault Rafale fighters for the French air force to help export prospects pending full ser vice entry of the aircraft. Export hopes also centre on the Larzac engine which powers the Russian MAPO Mig-AT trainer. Relations with General Electric, co-manufacturer of the CFM56, have improved considerably since Bechat's arrival. "There is much less tension now," he says. Snecnia has agreed to join the proposed 445kN (100,000lb)-thrust version of the GE90 engine for growth Boeing 777s, and is also set to par ticipate in the new Pratt & Whit- ney/GE GP7000 engine for the forthcoming Boeing and Airbus high-capacity aircraft. Agreement on Snecma taking a risk-sharing stake in the planned GEXX for the stretched A34O-500/600 will come "very soon", says Bechat. • Judge favours KLM in preliminary court skirmish KLM HAS WON a partial vic tory in die New York Supreme Court in the first round of its legal battle with partner Northwest Airlines over shareholder rights. The battle goes back to an acri monious boardroom fall-out between the two airline manage ments just over a year ago. North west accused KLM of attempting to gain control of die company, and adopted a series of measu res to pre vent its partner from increasing its 18.8% shareholding or its board room influence. The Dutch carrier's first argu ment is that the original Northwest shareholders have attempted to "alter existing agreements", in cluding appointment of board members, so "weakening" KLM's position as a shareholder. The Supreme Court has found in a preliminary decision that there is a case to be answered on these points, although it has also ruled diat other issues relating to KLM's influence over mergers and share sales will not be examined. KLM is considering filing an appeal against this part of the ruling. Asecond court case is pending in Delaware over Northwest bids to cap shareholdings in the company at 19%. KLM claims that this would invalidate its option to build its stake to 23.4% in 1998. KLM confirms that the operational alliance is still being expanded. • NEWS IN BRIEF • AIRONE TAKES ON NOMAN Italian domestic airline AirOne has strengthened its challenge to Alitalia on the key Milan-Rome route with a deal to take on the operations of small domestic carrier Noman. Despite its size, Noman has built up a 4% market share on the Milan- Rome route, helping to add to AirOne's existing 25%, and providing valuable slots at Milan's Linate Airport. The carrier, based at Rome with two McDonnell Douglas DC-9s, will lease its operations to AirOne, which operates eight Boeing 737s. • AIR CANADA'S SHARE GAIN Air Canada has now sold its remaining preference shares in Continental Airlines for around $154 million, repre senting a fivefold increase in value since the shares were purchased in 1993. The cash will be used to repay debt, says the Canadian airline. President Lamar Durrett has said that the sale will not affect the company's partner ship with Continental. • CHINA AIRLINES STAKE A16% stake in China Airlines could soon be for sale if the Taiwanese state-owned in vestment organisation, the CADF, goes ahead with plans to dispose of part of its 82% holding in the carrier. The idea of a possible sale was first proposed in mid-1996 (Flight International, 17-23 July, 1996), with mainland Chi nese investors tipped to be among the potential buyers. • MALEV PRIVATISATION Hungary is reported to be looking at a further step in the privatisation of flag carri er Malev. The state could reduce its holding from 64% to just over 50%. The first stage of privatisation took place in December 1992 when Alitalia took a 30% stake, with 5% going to an Italian investment agency. FLIGHT INTERNATIONAL 22 - 28 January 1997
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