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Aviation History
1999
1999 - 2239.PDF
HEM0UNE& KLM-Alitalia seal 'unprecedented' deal CHRIS JASPER/LONDON KLM AND Alitalia have agreed details of their alliance, to be launched on 1 November, claiming it "represents a new industrial model for air transport in Europe". In an Alliance Settlement Agreement signed last week, the pair defined an earnings-sharing formula according to which they will divide earnings (calculated before tax and other deductions) on a50:50basis.Until31March2001, however, only profits in excess of 450 million euros ($470 million) will be shared. The airlines - partners in the emerging Wings alliance - have also agreed to create a "single, uni fied management structure" or Network Organiser, for the passen ger and cargo joint ventures they agreed to establish last November. The alliance will see the Dutch and Italian flag carriers fully inte grate their global networks. It involves KLM cityhopper, Alitalia Team and Alitalia Express, but no other subsidiaries. A further announcement on the structure and principles of the alliance's gov ernance is due next month. This will define the powers of a new Joint Alliance Board compared to those of the two carriers' boards. Operational, commercial and economic integration under the Network Organiser will take in activities including network plan ning, marketing, distribution, sales and revenue management. Each airline will continue to manage its own fleet and flightcrew supply activities, as well as engineering, maintenance, handling and cater ing. The pair have also agreed to study "further financial, organisa tional and legal integration" to be implemented before 1 April, 2002. The Dutch carrier's chief execu tive Leo van Wijk describes the alliance as "the most complete integration of commercial passen ger and freight operations in our industry". His opposite number at Alitalia, Domenico Cempella, says the depth of co-operation involved is "unprecedented". In a further radical step, the air lines have agreed that with imme diate effect all future fleet decisions "will be undertaken jointly". For new orders, they will "share the investment on an equal basis". Cash from aircraft disposals will also be shared 50:50. The carriers are pitching their alliance as "Europe's largest airline in terms of passengers carried" and regard its multi-hub nature - revolving around Amsterdam Schiphol, Milan Malpensa and Rome Fiumicino as a major strength. KLM has surprisingly agreed to pay Alitalia 100 million euros to compensate it for losses incurred in launching Malpensa. The alliance runs for 10 years from the signing of a Master Cooperation Agreement last November. Itwill be automatically renewed unless either party gives three years notice of its termina tion. KLM can pull out and receive L484 billion ($255.4 million) in compensation should Alitalia fail to privatise before next June. Italian financial sources say Rome is seeking a stable group of shareholders to form the nucleus of Alitalia's new ownership. The pri vatisation may see KLM take a 6- 7% stake, although the airlines have played down suggestions that a major equity swap is planned. • Trio pump money into Astrolink venture TRW, LOCKHEED Martin and Telespazio have agreed to invest $900 million in Astrolink, a $3.6 billion venture to provide global broadband satellite commu nications service. In return, Lock heed Martin has received a contract from Astrolink to build four satellites with TRW-supplied Ka-band payloads. Astrolink will allow companies to configure global virtual private networks and will provide high bandwidth interactive services such as e-commerce and video conferencing. Lockheed Martin Global Telecommunications owns 46% of the joint venture, while TRW and Telespazio, a Telecom Italia company, each hold 27%. The founding partners finalised their investment agreement after the venture received government approval in Europe and the USA. Negotiations continue with addi tional strategic equity partners, says Celso Azevedo, president of Bethesda, Maryland-based Astro link. The company plans to begin services in2003 and, depending on demand, could increase its constel lation to up to nine geostationary satellites. The satellites will be based on Lockheed Martin Commercial Space Systems' proven A2100 spacecraft bus, which Azevedo says will help Astrolink "lead the race to deploy the first of a new generation of flex ible, reliable, high-speed, global wireless data services." The high-capacity packet- switched communications payload will be supplied by TRW Space & Electronics,which has experience developing the payload for the US Milstar military communications satellite. • GE90 engine variant flies GENERAL ELECTRIC has begun tests of the GE90-94B turbofan for the Boeing 777-200ER on its 747 testbed. US certification is due next April and service entry with Air France the fol lowing November. The tests are expected to validate features of the ad vanced three-dimensional high-pres sure compressor for the 777-200X/300X's GE90-115B. See Air Transport, P15. Hushkit makers push for EU court action PRESSURE IS mounting on the US Government to take legal action against the European Union (EU) unless it repeals legis lation banning the addition of Stage 3 hushkitted airliners to the European register after next May. Lobbyists for US hushkit manu facturers believe the government could file a protest this montli with the International Civil Aviation Organisation (ICAO). The US Senate has called on the government to ask the ICAO Council to rule whether the EU's hushkit ban complies with interna tional standards. The USA has delayed action in the hope that the EU would repeal the ban. That hope faded with a 20 July letter from the European Com mission (EC) saying that, while it is ready to address US concerns, "the environmental objective of the reg ulation cannot be undermined". The EC agreed in April to delay implementation of its non-addi tion rule by a year after the USA undertook to push for the acceler ated introduction by ICAO of more stringent Stage 4 noise limits (FlightInternational, 7-11 May). • FLIGHT INTERNATIONAL 4 - 10 August 1999
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