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Aviation History
1999
1999 - 0380.PDF
]£AL>LJJX]£2 Alleged rule bending stymies BA plans to start Italian airline CHRIS JASPER/LONDON PAUL PHELAN/CAIRNS SECRET BRITISH Airways plans to establish a franchised airline in Italy have been hit by alle gations that Australian regional carrier National Jet Systems (NJS), which had aimed to launch the ser vice, has been trying to circumvent European regulations to gain an air operators certificate (AOC). NJS had hoped to source an AOC for the new airline by buying a major stake in struggling Irish scheduled carrier Cityjet. The Irish Public Enterprise Ministry, meanwhile, has launched a probe into the planned transac tion, which would have employed a complex ownership structure to overcome a 49.9% limit on owner ship of an Irish airline by a non- European Union national. That purchase is on hold after NJS failed to complete payments on the deal. According to copies of NJS documentation in Flight lnternat- ional's possession, the new BA carri er has the working name Italian National Airlines (ILAN), and would have been based at Rome Fiumicino Airport, which Alitalia has chosen to downgrade as a hub as it builds up Milan Malpensa. The documents reveal that BA, NJS and Italian merchant bank Gallo collaborated on the new air line project. The study, says the NJS document, concluded that competition in Italy is in its infancy, and that although Alitalia enjoys 85% market share, satisfaction with it "is low as product standards and seat availability are poor". BA already runs significant op erations in France and Germany, leaving Italy as the major European market where it does not have a foothold. The choice of NJS to launch ILAN stemmed from the airline's links with Qantas, for which it provides regional aircraft services. The Australian flag carri- eris25%-ownedbyBA. NJS planned to launch the start up with five British Aerospace 146- 300s purchased from Taiwanese carrier UNI Air by Global Air Australia, and leased to NJS. The NJS plan faced a major hur dle, however - that of securing a ,m LOI • .w T..tMss; - & - " Cm/ET 1 \ i Nationaljet had hoped to launch a BA franchise after Cityjet purchase relevant AOC, given the restric tions on non-EU ownership of European carriers. NJS chief executive Warren Seymour's bid for Cityjet (and its AOC) was inspired - at least in part - by the need to surmount this obstacle. Cityjet chairman Paul Coulson proposed "an obvious fix" to this problem, suggesting that Seymour buy 49% of stock and an additional 11 % be held "in trust" for him and NJS partner Adele Lloyd, before being transferred to "an EU national" of their nomination. As part of this mechanism, a holding company, Girner, was to have been setup, transferring49% of its shares to Seymour and Lloyd, who would "also have voting rights on additional shares in order to apply effective management and voting control". In parallel, National Jet Ireland (NJI) was to have been formed (51% -owned by Girner and 49% directly by Seymour/Lloyd) to "provide for the establishment of a mirrored AOC...based on the existing Cityjet AOC", the docu ments show. ILAN, meanwhile, would be formed independently by a syndi cate of international investors, together with Seymour and Lloyd, with NJI providing aircraft, crew, maintenance and insurance on a "performance based wet-leasing arrangement". The airline would have run domestic and regional services. NJS documentation reveals that ILAN would then have bought 100% of NJI, thus securing "full independence of the BA franchise operation from Cityjet activity in order to ensure no conflict between BA and Air France [a commercial partner of Cityjet]". NJS agreed a Ir£3.5 million fee ($5 million) for control of Cityjet, paying nearly Ir£l .95 million. The deal collapsed when Seymour was unable to raise the balance. The Irish public enterprise min istry savs it has "been in correspon dence" with BAel46 and Saab 2000 operator Cityjet over the deal, and adds that the inquiries continue. BAdeclines to comment, while Cityjet and NJS failed to respond to telephone calls. • Boeing delays 767-400ERX service entry to 2003 PAUL LEWIS/WASHINGTON DC BOEING IS pushing back the projected entry into service date of the 767-400ERX to 2003, as American Airlines' interest in the proposed extended range development cools in the face of softening traffic and yields. Initial delivery of the 767- 400ERX had tentatively been tar geted for March 2002. It is understood this has slipped back a further 12 months. Boeing is look ing primarily to American Airlines to launch the planned develop ment of die new -400 stretch. The Dallas-based carrier says it has "looked at and talked about" the aircraft as a "possibility" for use on routes from the USA to Europe and South America. Industry sources say the move to delay the -400ERX is in response to the airline's concern over grow ing excess transatlantic capacity and falling yields. Passenger rev enue for the final quarter of last year fell by 3 %. American's trou bles have been compounded by recent industrial action by pilots. Boeing is planning to increase the -400's maximum take-off weight to 211,100kg (465,0001b) and extend its range by 1,110km (600nm) with the addition of 7,580 litres (2,000USgal) of fuel in the horizontal stabiliser. The aircraft will require an increased 68,0001b (303kN )-thrust powerplant. General Electric is proposing to American an advanced version of the CF6-80C2, with improved tur bine and new hybrid composite fan blades. Pratt & Whitney is pitch ing the new PW4068 growth ver sion of its 2.39m (94in)-diameter fan PW4000 series. Rolls-Royce is offering the planned Trent 600. American is interested in the air craft as a potential modest growth replacement for some of its older 767-200s. The airline operates 22 -200ERs and eight shorter range -200s. It also has 45 -300ERs, the last four of which were delivered at the end of last year. The carrier is focusing more immediate attention on inducting its first two 777-200ERs into ser vice. The aircraft are initially being used between Dallas/Fort Worth and London Gatwick and will re place MD-11 s on the Osaka route. American has ordered 34 777s and is to receive nine more by the end of the year. It recently received thefirstofl00737-800s.' Q 4 FLIGHT INTERNATIONAL 10 - 16 March 1999
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