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Aviation History
1999
1999 - 0010.PDF
HCAOUNCS Ex-Cathay executives try to save PAL ANDRZEJ JEZIORSKI/SINGAPORE FOUR SENIOR executives at Cathay Pacific Airways have quit to form a new management consultancy that will try to save struggling Philippine Airlines from collapse. The executives are Peter Foster, formerly Cathay's general manager for Taiwan and the Philippines, who will become chief company adviser; Michael Scantlebury, an aircraft financing executive at Cathay parent Swire Pacific, who will be senior financial adviser; Andrew Fyfe, in charge of ground services for Cathay in Germany, 8 who will be senior adviser, ground services and training and Richard Wald, head of maintenance for Cathay in France, who will now be senior adviser, maintenance and engineering. All four were involved in Cathay's due diligence procedure during aborted negotiations late last year to form a strategic part nership with PAL. They have now become partners in the newly formed consultancy Regent Star Services, based in Hong Kong, and are expected to be joined by an unnamed fifth executive who will be responsible for the commercial and marketing side. PAL says its board and the gov ernment-appointed Interim Re habilitation Receiver have approved a five-year technical ser vices agreement with Regent Star. According to a Hong Kong-based airline analyst, the company is being hired by PAL's major share holder, tobacco magnate Lucio Tan, and the partners are being offered "substantial incentives" to revive the carrier's fortunes. The team's rescue bid is being carried out through the newly formed consultancy because local Philippine law prevents foreigners being appointed as senior execu tives of the national flag carrier. The announcement was expect ed to be followed within 48 hours by an injection of capital into PAL from its shareholders, according to a statement by Foster. After talks with Cathay col lapsed, PAL submitted its own rehabilitation plan to the local Securities and Exchange Commis sion (SEC), whose chairman, Perfecto Yassay, warned that the airline would be shut down perma nently if the plan was inadequate. Before the Regent Star deal was announced, the proposal was rejected by many of PAL's credi tors, who said it still required a strategic partner. • 747 cut forces Northrop Grumman to take pre-tax charge NORTHROP GRUMMAN is taking a pre-tax charge of $125 million in the fourth quarter of 1998, mainly because of a reduc tion in deliveries of fuselages for the Boeing 747-400 programme. A $20 million charge was also taken to cover a cost estimate increase on the Directional Infrared Counter- measures (DIRCM) programme. Boeing is slashing 747 produc tion from a high of five a month in late 1997 to two a month this year and could go as low as one a month from 2000 as part of a wider cut to airliner production announced late last year. Northrop Grumman is a suppli er of major structures and sub assemblies to virtually every Boeing airliner and apart from the 747 fuselage, it also supplies Boeing with all 747 doors and tails. In 1997, commercial aircraft assemblies accounted for 14% of total company sales of $9.2 billion. The company is already pushing through a job loss programme affecting 3,700 employees, much of which is attributable to the Boeing cutbacks. Some $ 12 0 million of the charge resulted from reduced 747 fuselage rates and the knock-on effect on production efficiencies at North rop Grumman's production sites. In early December, the firm esti mated that the cut would reduce 1999 sales by $150 million, fol lowed by similar amounts over the next three years. It now estimates the sales loss this year at $350 mil lion. Overall, the company antici pates a slight sales rise this year. The DIRCM charge results from a schedule stretchout because of delays in completing the second series of live-fire tests. J Northro • Denel and BAe pave the way for industry link SOUTH AFRICA'S Denel and British Aerospace have taken another step towards inte grating Denel into the emergent European defence and aero space alliance on 7 January with the signing of a memorandum of understanding setting the framework for closer ties. The agreement, signed by Stella Sigcau, South Africa's public enterprises minister, and John Weston, BAe chief execu tive, covers the transfer of tech nology to Denel and placement of aerospace work and the inter national marketing of South African products. At the heart of the agreement is a commitment by BAe to include South African defence interests in discussions over the unified Weston: signed technology transfer deal European defence industry, says Allan MacDonald, BAe managing director for Asia and Southern Africa. "The South African gov ernment wanted to ensure that they weren't left at the gate [of European consolidation]," Mac- Donald says. The agreement could trans form the South African industry if it could become a supplier of core technologies and products to Europe, he says. The next stage in the integration process is likely to follow the pri vatisation of Denel by the South African Government. Potential work includes replacing the US Mojave desert test site with South Africa's OTB test range as a European evaluation centre for hot and high conditions, while Denel's Kentron division has world leadingskills in missile technologies, MacDonald says. • FLIGHT INTERNATIONAL 13 - 19 January 1999 Aerospace awards THE LIST OF sponsors for The 1999FlightInternational Aerospace Industry Awards has been completed with the addition of Airbus Industrie, Marconi Electronic Systems and SITA. They join Bom bardier, CFM International, Lockheed Martin, Lucas Aerospace, Rockwell Collins, Sextant Avionique and Smiths Industries. The event will culminate in a gala dinner on 14 June, during the Paris show. Entry forms are available from Lisa Jenkins; tel +44(181) 652 3882. The Awards, recog nising excellence and achieve ment, cover 10 categories from Air Transport to Training and Safety, and Aerospace Pers onality of the Year. •
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