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Aviation History
1999
1999 - 2739.PDF
HEADLINES BAe set for merger shake-up CHRIS JASPER/LONDON THE FUTURE SHAPE of British Aerospace is becom ing apparent as the UK giant gears up for a restructuring of its man agement and corporate structure following approval of its merger with GEC's Marconi Electronic Systems. BAe hopes to announce details of the changes before the end of the year, when it aims to be in a position to formally launch itself as a 'new' company. The company confirms it has hired consultants to explore a name change. Chief executive John Weston says he already knows what the new structure will look like and that "it will be quite radical". Announcing positive results for the last six months, Weston stated that the company is one more merger away from becoming the global player it aims to be, adding that the move would be a transat lantic one. And though BAe does not entirely rule out a merger clos er to home, its own view on future European consolidation does not envisage such a move. The company's one unresolved European acquisition question concerns Alenia Marconi Systems, inherited via Marconi. The UK company had originally hoped to incorporate the joint venture, but Alenia parent Finmeccanica resist ed such a move, and BAe is now close to sealing a deal which will expand the business to include some of its own activities while keeping it as a joint venture. Weston says Finmeccanica is pre pared to see Alenia merged along sectoral grounds, and plays down the possibility of BAe taking an equity stake in the Italian player. BAe's strategy also focuses squarely on the defence side of its business, and though Weston refutes suggestions that the com pany would contemplate exiting the civil sector or selling its Airbus wings operation, BAe is equally adamant that it will not commit to launch of the A3XX - on which Airbus is staking its future - with out securing maximum launch aid. BAe would be expected to make a contribution to A3 XX launch costs (estimated at $11 billion) equivalent to its 20% share in Airbus, but executive director How BAe views possible European consolidation scenarios Source: BAe (based on brokers estimates) 30 c ,o 1 25 FLIGHT GARETH BURGESS 99 BAe/Marconi Dasa/CASA Aerospatiale Matra Thomson-CSF : Northrop Grumman $1UK defence electronics 120 •15 10 I r I I New BAe Dasa/ 'Franco- Aerospatiale French' Matra Dasa/ Dasa/ Defence T-CSF Northrop Electronics Grumman Mike Turner says the company would require the maximum allow able government funding of 33% of non-recurring costs, to be repaid later, and would seek to raise a sim ilar amount from sources including its own suppliers on the project. "The key element will be the cost of the capital and a major part of that will be the government funding," says Turner, "and we have put an application in to the DTi [Department of Trade and Industry] and made it clear to them that it will be an important part of the decision process." By reining in its contribution to A3 XX launch funds, BAe would also minimise its exposure on a project that rival Boeing insists has no market. BAe itself is in no hurry to launch, saying deadlines im posed by Airbus governments are "always slipping". Although Airbus president Noel Forgeard is keen to offer the A3XX to airlines by the end of the year, the process will not be rushed, the company says. Given that the governments are reluctant to grant funds without the restructuring of Airbus into a single entity, BAe's stance puts the onus on Aerospatiale Matra and Dasa/CASA, which could resolve the impasse by merging their own Airbus operations. • UN builds up East Timor air assets PETER LA FRANCHI/CANBERRA THE US A is to deploy an intel ligence gathering aircraft to support the UN-backed Inter national Force East Timor (TNTERFET) now being de ployed to restore security in the Indonesian province. According to the Director of the US Joint Staff for Operations, Admiral Scott Fry, the aircraft are expected to be either a Lockheed Martin EP-3C or a Lockheed U-2 and will be supported by a ground based intelligence analysis team. A second airbridge is being cre ated at Baucau airport on the north coast of East Timor to support a dramatic expansion of the existing airbridge between Darwin and Dili. Fry says the USA undertook assessments of the Baucau airport as early as June this year to deter mine whether or not it was capable of handling Lockheed C-141 and Boeing C-17 operations. At least six nations are contribut ing aircraft to support the INTER- FET deployment. The USA is making available C-17s, Lockheed C-5s and Lockheed Martin C-130s normally based in Hawaii and Japan to support the airbridge and the transport of other nation's heli copters to the main INTERFET operational base at Darwin. The UK used two Hercules and a BACVC10 to support the deployment of some 250 Gurkhas to Darwin on 16 September. It is unclear, however, whether the air craft will remain available to the peacekeeping operation. Portugal is providing a single C-13 0 and four helicopters. Italy is to contribute a single Alenia G222 to support its detachment of 200 paratroopers. The Royal New Zealand Air Force has contributed two C-130s and four Bell UH-1H helicopters. Aircraft will also be made available by the Canadian National Defense Force. • Lockheed Martin clears Comsat hurdle LOCKHEED MARTIN has received US clearance to com plete the first stage of its merger with Comsat. The company will acquire 49% of the commercial satellite communications service provider, but is waiting for Con gress to pass legislation allowing it to complete the take-over. The deal received anti-trust approval after the Federal Comm unications Commission (FCC) approved Lockheed Martin's des ignation as an authorised telecom munications carrier, allowing it to merge with Comsat. Even with this approval,Lockheed Martin's own ership is limited initially to 49%. • FLIGHT INTERNATIONAL 22 - 28 September 1999
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