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Aviation History
2000
2000 - 1265.PDF
Rockwell Collins poised for Sony Trans Com takeover US Airways is the latest customer for Sony's P@ssport system on its A3 30-300 EMMA KELLY/LONDON ROCKWELL COLLINS is believed to be finalising the purchase of in-flight entertain ment (IFE) hardware and content provider Sony Trans Com, as it targets the narrowbody market in the latest round of consolidation in the IFE hardware industry. Rockwell Collins was expected to announce the purchase at the recent In-flight Passenger Enter tainment and Communication (IPEC) conference in London, but the deal was not confirmed, prompting rumours diat the acqui sition had been slowed by the Rockwell Collins board. Rockwell already has an IFE system manufacturing division - Rockwell Collins Passenger Systems - formed from the pur chase of Hughes-Avicom Inter national in 1997. The takeover of Sony's IFE divi sion would further its aim of domi nating IFE system supply to narrowbody aircraft. Rockwell Collins' Total Enter tainment System (TES), inherited from Hughes-Avicom, is well- established in the widebody mar ket, with carriers including Air France, American Airlines, British Airways, Delta Air Lines and Japan Air Lines. It was recently ordered by Qantas and Scandinavian Airlines. But Rockwell has failed to make its mark in single-aisle IFE "provi sion, while Sony is well-established in this market with Paves. Despite the order list, TES has failed to meet expectations, with BAin particular struggling with reliability problems. Sony's equiva lent system, P@ssport, is flying - and popular - with South African Airways and Air Canada, offering audio- and video-on-demand, a capability that Rockwell Collins has yet to field. Sony's third cus tomer, US Airways, has just taken delivery of its first P@ssport- equipped Airbus A3 30-300. The purchase of Sony Trans Com would cause problems for Rockwell Collins in terms of sup porting two widebody interactive IFE systems, which Rockwell would have to do because of the scale of TES orders. Rockwell Collins and Sony will not comment on the possible acquisition, but sources say talks have been going on for some time and the process has reached die legal contract stage, with some contractual issues still open. Sony Trans Com is the only one of the four major IFE hardware manufacturers not aligned with an avionics supplier. Lead manufac turer Matsushita has an alliance with Honeywell, while Sextant purchased the former B/E Aerospace IFE division to form Sextant In-Flight Systems. The Sony unit was courted by AlliedSignal, which conducted a process of due diligence, but the deal collapsed following its merger with Honeywell. Industry sources say Rockwell Collins approached the Sony divi sion before AlliedSignal showed an interest, but Sony initially favoured AlliedSignal. 3 City Bird loses Congo case against Sabena ABRUSSELS court has ruled against Belgian carrier City Bird in its row with part-owner Sabena over last year's launch of services to die Democratic Republic of Congo. City Bird has been ordered to pay Sabena nominal damages of a single Belgian franc, however, and the court found no grounds for me flag carrier to end a five-year con tract under which it wet-leases two City Bird Boeing MD-lis. The court ruled that City Bird had broken an agreement with Sabena in launching Brussels- Kinshasa flights, as it should have notified the latter of its plans to offer a rival scheduled service. City Bird claimed it had the right to decide its own policies, and stressed that the Kinshasa route was operated on behalf of Congo flag carrier Lignes Aeriennes Congolaises (LAC), to which it wet-leased a Boeing 767-300ER. City Bird has discontinued oper ations for LAC] because of mount ing conflicts with the Congolese administration. City Bird complained that Sabena had sought revenge by sell ing most of an 11.2% sharehold ing, causing City Bird shares to diminish in value. Sabena says this transaction was a normal financial operation, and diat it still held a 2.99% interest in City Bird. • Fairchild buy-out frees up cash PAUL LEWIS/WASHINGTON DC CLAYTON, DUBILIER & Rice (CD&R) and Allianz Capital Partners have completed their purchase of Fairchild Aero space, taking an 80% stake, and are offering the remaining 20% to the founding Domier family and senior management. The agreement gives CD&R a controlling 60% stake and Allianz another 20%, in return for an immediate S300 million cash injec tion and the promise of $100 mil lion more when needed. Five Dornier family members are being offered up to 15% and the manage ment up to 5%. "They will determine their per centage and have a window in which to make that decision," says Charles Pieper, Fairchild's new chairman and chief executive. "But in no instance will it be more than 20% and it may be as low as 5%." Fairchild has invited more than 50 senior staff to invest direcdy in the company and plans to offer other employees stock options. Former owner and chairman Carl Albert retains a small stake and a seat on the board. The deal clears the way for another $800 million to be made available in bank loans and debt financing. Fairchild claims this will allow it to deliver the 44-seat 428JET by 2002, the all new 70- seat 728JET by November 2002 and stretched 928JET by 2005, while completing a further unde cided development. Pieper blames the six-month slippage in delivery of the first seven 728JETs on the uncertainty that surrounded Fairchild during its search for new backers, although the eighth aircraft is on schedule. "Clearly this has had an effect," he says. Pieper is confident that Euro pean and US airline customers can be found for the launch of the 92 8JET this year and claims to be in talks with "several very interested customers". Attention dien turns to a 5 0-seat 5 2 8JET for regional carri ers or a stretched 120-seat 1128JET, widi "two years in which to decide" between them. • FLIGHT INTERNATIONAL 18 - 24 April 2000 21
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