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Aviation History
1998
1998 - 0076.PDF
BUSINESS NEWS IN BRIEF • OSC BOOSTS GPS ARM Space services group Orbital Sciences (OSC) has finalised the acquisition of Achtech in a deal which it says will create one of the world's leading providers of satellite naviga tion and communications equipment. Achtech, which pioneered combined use of die US global-positioning system (GPS) with Russia's GLONASS, will be merged with OSC's Magellan equip- mentto create a company widi sales of aboutSl25 million in navigation products. • AAR COMPLETES AVSCO AAR has completed its ac quisition of AVSCO, a new aviation-parts distributor with sales of around $80 mil lion. The business will be merged with AAR's Cooper Aviation unit, acquired in June, creating a North American parts distribution business with combined sales of around $140 million. • AVIATION SALES GROWS US spares group Aviation Sales has strengthened its parts-manufacturing arm with the acquisition of Apex a small privately held precision aerospace machining opera tion in Phoenix Arizona. The deal was financed by an $8.3 million share swap. • TITAN BUILDS DEFENCE IT DBA Systems, a US defence information technology and intelligence group, is to be acquired by Titan. DBA with will bring sales of over $2 5 mil lion to San Diego-based Titan, which plans to pool DBA with its own growing defence- intelligence business. • SERVAIR REDUCTION Air France Group indicates that it would be willing to cut its 75.2% holding in the Servair in-flight catering business, which is angling to increase its market presence through deals with odier avi ation companies. Insurers warn on 1997 KEVIN O'TOOLE/LONDON AVIATION INSURERS are again warning diat they face a serious shortfall for 1997 following estimates which have put the cost of losses at close to $1.4 billion, despite a relatively encouraging year for air safety. The preliminary year-end figures from the UK Airclaims consultancy, widely used through out the main London insurance markets, suggest that while the losses for the year will be less than the $ 1.6 billion in losses chalked up in 1996, it will still go down as the fourth worst on record. The figures come despite an apparent levelling-off in the num ber of accidents. Passenger fatali ties, at 1,056, were down by more than one-third on 1996 and almost exactly on average for the 1990s. Aircraft losses were also close to the average, including the write-off of 22 Western-built jet airliners. The cost of losses, however, has continued its upward trend, with even partial damage resulting in potentially heavy claims. Repair to the Virgin Atlantic Airbus A340- 300 which landed at London Heathrow widi only one set of main Losses for Western-built airliners Source: Aitclaims FLIGHT 1,200 i- 1,000 Passenger liabilities Jet Turboprop Major and partial hull losses Jet Turboprop 800 - 86 87 92 93 94 95 96 97 landing gear deployed is put at about S29 million. "The worry for underwriters is that if 1997 is a relatively good year for air safety, what happens if there is a bad year?," says Graham Nichols, managing director of London's Westminster Aviation Insurance Group. At the same time, an excess of underwriting capacity has contin ued to drive down airline insurance rates and Nichols believes that overall premium income will be "significantly below" the level of claims for 1997, with the market adrift by as much as 30%. The downward spiral in rates seems to have continued through out the year. Insurance broker Wil lis Corroon estimates diat rates for hull cover were down by about 30% and liability by close to 2 5 % during die crucial year-end period, which is when the bulk of the world's air lines renew tbeir premiums. • Swissair 'back in profit' in 1997 ANDRZEJ JEZIORSKI/MUNICH THE SAIR GROUP says that its core Swissair airline opera tions are due to show a profit for the first time in eight years when the 1997 results are revealed. The airline points to soaring load factors, which have climbed to 70% from just above 60%, as well as a 16% improvement in seat costs, to around SFr0.09 per pas senger kilometre (e9.8 per mile). The aim is to cut this further, to SFr0.07,bytheendofl998. Sabena, in which Swissair holds around a 49% stake, is also due to unveil a substantial financial improvement, having put behind it the industrial unrest and restruc turing costs which left it with record losses of BFr9 billion ($240 million) in 1996. Unofficial estimates are that Sabena's 1997 figures, to be released in April, will show a much- reduced loss of BFrl billion, fol lowing a recovery which has seen a 30% rise in passenger traffic and 26% for freight. The target is to make profits in 1998. Meanwhile, Swissair has confirmed that plans to take a stake in Italian carrier AirOne, triggered by Alitalia's decision to ally itself with KLM, is due to be complete by April. The Swiss carrier is expected to take a share of close to 30% in the Alitalia rival. AirOne, which will now become a full partner in Swissair's Global Alliance, says that its operations virtually doubled in 1997, giving it passenger figures of around 1.4 million and sales in the region of L200 billion ($113 million). • Finmeccanica cash plan wins backing FINMECCANICA HAS won backing for its recapitalisation plan following the year-end meet ing with its majority owner, Italy's giant state-holding company IRI. The defence/aerospace group has been angling for "up to" L2,000 billion ($1.2 billion) to shore up its ailing finances. The move was finally approved in December by IRI, which has the majority 63.4% of Finmeccanica, and a group of banks which own another 23%. The remainder is held by private investors. The cash is urgently needed to cover debts of more than L8,000 billion and predicted record losses for 1997 of more than L2,000 bil lion, including restructuring costs. The group expects a minor loss of around L12 7 billion in 1998. • 22 FLIGHT INTERNATIONAL 14 - 20 January 1998
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