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Aviation History
2001
2001 - 3606.PDF
BUSINESS MAINTENANCE Danish firm loses investors after attack Potential investors in FLS Aerospace (FLSA) maintenance operations have walked away from taking a stake in the com pany after the 11 September terrorist attacks triggered airline capacity cuts and the collapse of the market. The breakdown in talks came to light as the com pany announced a major restructuring plan last week. Negotiations between Europe's largest third-party maintenance provider and an unnamed investor were almost complete after months of talks when the terrorists struck. The Danish-owned company admits: "We were very close until 11 September. The investor is not looking to invest now." Now, faced with a potentially large reduction in heavy mainte nance business, FLSA is closing its Manchester, UK-based facility for all but A-checks and line maintenance work. Up to 620 jobs are at risk. In Dublin, the company is to reduce its over haul business by about 25% with the loss of around 150 jobs. Further redundancies are expected among support staff at the site. With Aer Lingus its single largest customer in Dublin, the company is watching anxiously as the Irish flag carrier struggles to survive the slump in transat lantic air travel. One prospect for new work is an offset agreement with helicopter maker Sikorsky to modify up to 12 Boeing 767s to cargo configuration in the event the US company wins a compe tition to supply helicopters to the Irish Government. Company wide, FLSA says the jobs of 900 of its 3,600 em ployees are at risk. The cuts are expected to be completed by the second quarter of next year. There are no plans to cut air craft overhaul at the company's main base at Stansted near London. FLSA says the strong showing of low-cost operators based at the airport has helped offset downturns elsewhere. ACQUISITION DAVID FULLBROOK / SINGAPORE Consortium unveils scheme to resurrect bankrupt Ansett Aircraft fleet will be replaced and 4,000 employees will keep jobs under new owners Australian businessmen Lindsay Fox and Solomon Lew have bought the bulk of bankrupt Ansett Australia's assets for A$l.l billion ($567 million). The two men are believed to have struck a deal to lease surplus United Airlines Airbus A320s for the operation. The resurrected airline will lease a fleet of 29 new A320s due for delivery from early next year at the rate of three aircraft per month in an agreement struck through Airbus for the United aircraft. Star Alliance partner United has announced plans to defer delivery of a large number of the aircraft it has on firm order as it struggles to cope with a sharp fall in passenger traffic following the 11 September terrorist attacks in the USA. Qantas recently struck a deal to buy 15 Boeing 737-800s that had been due for delivery to its Oneworld partner American Airlines. Tesna Holdings, the consortium formed by Fox and Lew, is expected to take on 4,000 Ansett employees and operate its terminals and maintenance bases. It intends to provide passengers with a full cabin service rather than adopt the "no-frills" product offered by rival Virgin Blue. It remains unclear whether Singapore Airlines, which has been working on a business plan to resurrect Ansett on behalf of administrator Andersen, will take on any kind of management role. Andersen expects the Tesna deal to be wrapped up before February, if creditors are happy with the undis closed cash injection included in the acquisition price and approve the offer. Initially, Tesna will operate Ansett's current fleet of 20 leased A320s. If business booms, the new carrier will either continue using some of the older aircraft after deliveries of the new A320s finish around October 2002, or order more new aircraft. The rest of Ansett's fleet will be returned to lessors or sold, with the proceeds used to settle employee redundancy claims and help pay off its creditors. Meanwhile the search continues for buyers for four of Ansett's regional subsidiaries. Fox and Lew are also expected to request aid, possibly financial, from the government in the coming weeks to help bolster Tesna Ansett. LOW-COST AIRLINES Ryanair bucks trend with 37% increase in traffic Irish low-cost airline Ryanair ignored the downward trend of many of its bigger rivals in its half- year results released on 5 November, announcing sharp rises in traffic, revenue and profits for the six months to 30 September. Traffic rose to 5.3 million, 37% up from last year; revenue rose to €344.2 million ($385 million), up 29%; and profits after tax amounted to €88 million, up 39%. The figures appear to justify Ryanair's ambitious expansion plans - the company plans to acquire another 50 used Boeing 737s in the next five years to add to its current fleet of 21 737-200s and 15 737-80OS. The low-cost sector has so far seemed largely untouched by the slump in the airline market. Ryanair's competitor Easyjet has also seen traffic and profits rise, especially since the start of the war in Afghanistan. However, Ryanair's yield contin ued to fall, down 6% - due to increased emphasis on fare cutting The low-cost sector seems largely untouched by the air travel slump to ensure high load factors. While Easyjet has started to focus on cost- conscious business travellers, Ryanair continues to go after the discretionary leisure market, where cost is an absolute priority. To maintain profits, Ryanair must continue to expand and cut costs, which will mean taking market share from established carriers. Fortunately for Ryanair, the slow down means that other carriers are losing passengers and abandoning maintenance contracts, aircraft, landing slots and routes, which Ryanair can acquire more cheaply. 36 13-19 NOVEMBER 2001 FLIGHT INTERNATIONAL www.flightinternational.com
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