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Aviation History
2000
2000 - 0181.PDF
BUSINESS Raytheon slump bucks US aerospace industry trend GRAHAM WARWICK/WASHINGTON DC ALREADY suffering financial troubles in its defence elec tronics business, Raytheon has been buffeted by a drop in performance at its aircraft manufacturing unit. Raytheon Aircraft (RAC) shipped 19 fewer aircraft than planned in die fourth quarter, and 10 less than in the same period of 1998. Elsewhere, Northrop Grum man reported a record year, with net profit doubling to $483 mil lion, on sales up slighdy to $9 bil lion, while General Dynamics and TRW both saw aerospace revenues climb on die back of their purchas es of Gulfstream Aerospace and LucasVarity respectively. Textron also saw turnover for die sector boom, fuelled by sales at Gulf- stream rival Cessna. Raytheon's fourth-quarter rev enues fell to $4.8 billion, 8% down on 1998, with low deliveries and higher costs at RAC helping depress earnings to $72 million, compared with $341 million the previous year. Difficulties at RAC - plus problems in the electronics and Engineers & Constructors segments - pushed company earn ings for the year down to $404 million, from $844 million, on rev enues up just 2% to $19.8 billion. "The fourth quarter was clearly a disappointment," admits Ray theon chief executive Dan Burnham. Raytheon expects per formance to improve in the second half of this year and points to a strong order intake in the fourth quarter, during which $8.5 billion was added to the backlog, boosting it to $28.4 billion by year-end, up Northrop Grumman's 747 work fell, but it still bad a record year in 1999 by 18% over the previous year. RAC president Art Wegner says 11 of the missed deliveries were due to production delays, and eight were customer-related (see P31). All will be delivered in the first half. Northrop Grumman's profits boom was fuelled by payments for remanufacture ofjoint Surveillance Target Attack Radar System aircraft for the US Air Force, and the turn ing around of the UK/US Directed Infra-Red Countermeasures pro ject, offsetting a downturn in Integrated Systems and Aero- structures due to lower civil sales. General Dynamics' sales jump ed 21 % to $9 billion and net earn ings increased by 22% to $715 million following its purchase of Gulfstream, which posted a 20% increase in revenues to $2.9 billion and a 29% leap in earnings. TRW soared on the LucasVarity acquisi tion, which pushed net earnings up 20% to $568 million on sales up 43% at $17 billion. Its aerospace and information systems business benefited most from the merger, with segment profit up 2 3 %. Textron was boosted by a strong performance at Cessna, which helped push income up 41% to $623 million on revenues up 20% to $11.6 billion. Cessna's sales soared above $2.2 billion. At Bell Helicopter, higher revenues on upgrades and military sales were offset by lower commercial sales. • Government cash lets Domodedovo buy fuel DOMODEDOVO Airlines plans to resume scheduled flights in early February after being promised cash owed by the Russian Government. Domodedovo, based at the Moscow airport of the same name, had its accounts frozen and had to cease flights last month after it defaulted on debts and could no longer afford fuel. The airline is itself owed 200 million roubles ($7 million) by government clients, however, including the defence ministry and Federal Border Ser vice, which use it to fly to Russia's Far East. The former has promised to repay 50 million roubles immedi ately, against which the airline is buying 2 50t of fuel to fulfil remain ing commitments to the military, plus 500t more to resume sched uled services from 4 February. Domodedovo general director Alexander Akimov says it is still owed 470 million roubles for 1997- 9, yet had to pay more than 100 million roubles in taxes last year. Suggestions in Russia that Moscow would like to see the airline fail and sell its assets are dismissed by Federal Service for Air Transport chief Vladimir Andreyev. The carrier operates three Ilyu- shin U-96-300s, 12 Il-62s and four Il-76s, to 10 destinations in the Far East and Central Asia, along with international charters. • MERGERS ++ BAE Systems is to acquire Watkins-Johnson Telecommuni cations, a US specialist in military communications surveillance. The Gaithersburg, Maryland-based group will become part of BAE Systems North America's Aero space Electronics division. ++ A $16.5 million plan by Far East Ventures to buy privately owned Renown Air, including carriers Renown Aviation and Air Niagara Express, has collapsed. ++ Cockpit and cabin digital safety systems specialist Head Up Technologies is to be bought by telephony com pany Intellicall. Both are Dallas- based. ++ Nordam Group has purchased Pilkington Aero space's Visual Systems business unit, which manufactures simulator display systems. Operations have been transferred from California to Nordam's Tulsa, Oklahoma-based Transparency division. ++ Jordan Airline Training and Simulation is to be privatised through the offer of a 100% stake to an airline or inter national aviation training investor. BA stake gains seats on Comair's board BRITISH AIRWAYS has taken a minority stake in South African regional carrier Comair in a move that cements the latter's sta tus as a franchisee of the UK flag carrier, which will get two seats on its board. The 18.3% holding cost BA R168 million ($28 million) and was bought from private equity fund Gensec and black empower ment company Co-ordinated In vestment Network. Comair operates nearly 400 ser vices a week between Johannes burg and Cape Town, Durban and Port Elizabeth; Cape Town and Durban; and to neighbouring Nambia, Zimbabwe and Zambia. Flights to Malawi are planned. BA director of investments and joint ventures, Roger Maynard, describes Comair as having "an excellent financial and service de livery record". Comair saw its operating profit rise to R77.6mil- lion ($13 million) for the six months to 31 December. Q FLIGHT INTERNATIONAL 1 - 7 February 2000 23
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