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Aviation History
1997
1997 - 3370.PDF
BUSINESS GEC makes progress on European tie-ups GEC BELIEVES that it is close to tying up its joint-venture plans with Finmeccanica and is "encouraged" by initial talks on European consolidation in the wake of the French Government's Thomson-CSF decision. GEC chairman Lord Prior, revealing improved first-half financial results, said that the Finmeccanica discussions had gone ".. .better than expected" and are on course to be tied up within the UK group's current financial year to the end of March 1998. The discussions, which opened in mid-year, involve creating a joint-venture company to cover ground and naval radar, command and combat and missiles business es. GEC-Marconi will also take a minority stake in Finmeccanica's avionics business. Prior says that GEC is "encour aged" by the Thomson-CSF deci sion and by "subsequent initial discussions on European defence- electronics consolidation". Senior sources within the group confirm that GEC is looking at a place in the new French alliance, which it hopes could emerge as the focus for a single European grouping. GEC has also taken the first major steps in its own long-awaited re-organisation, with confirmation that it will float the Anglo-French GEC Alsthom power and train- building joint venture. That could add around $1.7 billion to the group's cash pile. GEC-Marconi, meanwhile, led group profit improvements over the half year, with pre-tax profits growing by 29% to£150million($254million) and sales topping £1.6 billion. 3 NEWS IN BRIEF • KENYA PROFITS STEADY Kenya Airways has held pre tax profits steady for the first half of its financial year, at KShs635 million ($10 mil lion). The net results shot up to KShs539 million, largely because of exchange gains from the fluctuations of the Kenya shilling against US dollar-based currencies. Finnair records double profits as passenger numbers boom KEVIN O'TOOLE/LONDON FINNAIR SAW profits more than double over the first half of its financial year, making it die latest northern European airline to benefit from a passenger boom which has already contributed to record results for Lufthansa and gains at SAS over the latest quarter. Finnair posted pre-tax profits of FLM572 million ($110 million) for die six months to September, beat ing the full-year profit for 1996/7 and putting the carrier on course for record annual results. Although the second half is tradi tionally less buoyant, Finnair says that the year-end result will be "substantially better". The results were backed by an 11 % growth in passenger traffic and a 24% boom in cargo over die half. That included strong growth from Finnair's aggressive push into the neighbouring Swedish market in die wake of die rival SAS/ Luft hansa alliance. Finnair says that its new European services from Stockholm are already carrying as many passengers as other services between Finland and Sweden. Finnair itself is in talks over co operation with British Airways, which it confirms is with a view to linking in to its global network. The Finnish results are only the latest in a series of strong perfor mance figures to emerge from northern Europe. New figures from the Assoc iation of European Airlines show that, in the year through to October, passenger traffic for its members had grown by almost 10% across the board. Load factors have edged up to over 73 %. Lufthansa, which had earlier posted record profits for its September quarter, is showing a 13.5% growdi in mainline passen ger traffic for the year through to October and load factors of 73%. While the healthy growth, com bined with continuing cost-cutting plans, has produced a surge in profits, Lufthansa has come in for high-profile criticism over passen ger dissatisfaction at the levels of overbooking and ground service. Lufthansa's policy of overbooking flights by up to 15% has made headlines in Germany. On one day, 300 passengers were stranded at Frankfurt - leading to an assault on one of the airline's ground staff. Roland Stein, chairman of the group's works council blames Lufthansa's "unrestrained" cost- cutting policy and lack of personnel planning for the troubles. In direct response, die airline plans to employ 100 more staff to handle passengers at Frankfurt, and 40-50 at its second hub in Munich. • Western Pacific wins court approval for re-organisation WESTERN Pacific Airlines has won bankruptcy court approval for its own re-organisa tion plan, backed by the Smith Management Company (SMC), after the withdrawal of a rival bid from Frontier Airlines. Frontier helped to precipitate WestPac's descent into Chapter 11 bankruptcy protection in October when it withdrew from a merger. It later re-appeared as a potential res cuer, outlining a bid with invest ment firm Wexford Management. The bid was withdrawn when creditors backed the WestPac management's plan together with SMC, an investment house which already holds a controlling stake in Hawaiian Airlines. The court has approved an initial $10 million loan from SMC which will be used to keep die airline aloft, and pay over due leases, avoiding groundings widiin the 18-strong Boeing 737- 300 fleet. Another $10-20 million is due starting 20 December. 3 FLIGHT INTERNATIONAL 10 - 16 December 1997
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