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Aviation History
2000
2000 - 1332.PDF
MERGERS ++ Thomson-CSF of France has filed for European Commission approval of its acquisition of the UK's Racal Electronics, an nounced on 13 January, after gain ing US regulatory approval for the move. It expects to complete the takeover "in the early summer". ++ California-based Computer Sciences is to buy Combitech Network, Saab's information tech nology subsidiary, as part of a deal which will see the Swedish compa ny outsource its IT support opera tions. ++ UK-based aerospace and defence electronics group Ultra Electronics is to buy DF Group, also of the UK, for£44 million ($70 million), including £21.8 million of debt. DF has two divisions, Datel Defence, a supplier of application software and system integration services, and Ferranti Air Systems, which provides IT systems to air ports and airlines. ++ Diversified US industrial group Teleflex has acquired protective coatings spe cialist Ethylene, adding it to its aerospace segment. ++ Canada's Derlan Industries has completed its acquisition of Illinois-based heli copter drive systems specialist Boeing Precision Gear. ++ Finnair's sale of tour operator Finnmatkat to Thomson Travel subsidiary Fritidsresor, which includes a long-term charter agree ment between the two, has been approved by the Finnish competi tion authority. ++ Acquisitive defence business Elbit Systems has increased its holding in fellow Israeli company Kinetics, a spe cialist in environmental controls, from 34% to 51%, exercising an option granted in July 1998. Elbit expects to complete its merger with electro-optical products company El-Op "in the near future". ++ UK flight training company Multiflight has bought Leeds/Bradford-based Yorkshire Light Aircraft. Yorkshire Aeroplane Club and Yorkshire Flying Services. ++ US aircraft parts distributor Air Repair has acquired Jacobs Service, and is now the certificate holder for the R-755 radial engine series power ing Stearman and Waco biplanes. UK to absorb sensitive side of DERA and float the rest STEWART PENNEY/LONDON THE UK Government is to spin off around 75% of the Defence Evaluation and Research Agency (DERA) and float it on the London stock exchange, while folding sensitive parts of the organ isation back into the Ministry of Defence (MoD). The proposal is a revision of an earlier model, according to which the MoD would have retained con trol of around one-third of DERA, including "core competencies". The model was widely criticised, with industry, trade unions and DERA sources doubting the viabil ity of the two-thirds being offloaded without key capabilities. The new model will see the UK Government take a "golden share" in the floated "New DERA", allowing it to impose restrictions on its activities. To retain its impar tiality when providing advice to the MoD, New DERA will be barred from manufacturing, while con cerns expressed by certain compa nies over potential damage to their intellectual property will be assuaged through the retention of relevant elements of today's agency within the MoD. Also to be retained are the Chemical and Biological Defence Sector, the Centre for Defence Analysis, the Defence Research Information Centre and the Defence Radiological Protection Service. The Aircraft Test Establishment at Boscombe Down is, however, among die list of sites under consideration for inclusion in New DERA, despite disquiet. A consultation lasting until early June will determine whether for eign or individual ownership of New Dera should be capped, and will determine which sites are kept within "Retained DERA". New DERA would be formed early next year, with a flotation shortly after. Chief executive Sirjohn Chisholm will head the new company, which will take around 9,000 of the agency's 11,500 employees. The UK's 1998 Strategic Defence Review opted to end cen tral funding of DERA and identi fied "a public-private partnership" as the best way to raise money. J DERA's air fleet is expected to become part of New DERA Industry and airlines assess Internet gains THE International Air Trans port Association (IATA) has estimated that the airline industry could save $12 billion - 8% of its total cost base - by switching to Internet-based solutions. IATA director general Pierre Jeanniot warns that at the same time there is a "risk of being blinded by modern e-commerce hype". Aerospace and defence manu facturers will also benefit in terms of cost and time savings relating to improved supply chain efficiencies, e-commerce specialists meeting in Toulouse, France, have heard. It is unlikely, however, that die industry will be able to support all of the ventures now emerging. Jeanniot, speaking in New York, described e-commerce as "a promising field", and said "sensibly applied, e-commerce techniques could have a favourable impact on our operating cost base, now $150 billion, of $12 billion, everything considered". He adds that airlines should cease to be market-share oriented and become "bottom-line driven", but does not see e-com merce as an easy route towards this. In the aerospace sector, e-com merce initiatives will aim to exploit "a 27% inefficiency" relating to industry fragmentation, over- complex supply chains, and excess inventory and monopolistic prices, saysLudo Van Vooren, seniorvice- president business development with parts exchange Parts- Base.com. Efficiency improvements could reduce transaction costs by 30- 70% on the procurement side when new business models mature, but in the shorter term, benefits will be through faster transaction times. A10-30% reduction in cycle times gained through Internet- based tenders and bidding and web-based collaborative engineer ing is possible, says Nils Herzberg of software company SAP. E-commerce would, however, have to involve all aviation compa nies to deliver these gains. "Frag mentation of the markets will deliver limited value," says Simon Jeacock, vice-president aerospace and defence at 12 Technologies, which is establishing the Honey well/United Technologies' MyAir- craft.com exchange. "Unless we get the airlines to play, we don't get any one for original equipment manu facturers to sell to," he adds. • 26 FLIGHT INTERNATIONAL 25 April - 1 May 2000
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