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Aviation History
2001
2001 - 3637.PDF
POWER CUTS The slump in engine orders is resulting in huge job losses - with many programmes threatened GUY NORRIS / LOS ANGELES DATA COMPILED BY AIR TRANSPORT INTELLIGENCE T wo months and almost 20,000 job losses after the 11 September attacks on the USA, the aero engine business continues to struggle with the massive re adjustments sweeping through the indus try. Swelling up from "ground zero", the recessionary tidal wave first hit airlines, then aircraft manufacturers, and finally engine makers themselves. The wave is now beginning to hit second- and third- tier suppliers and contractors. It is not only washing away jobs - it also threatens the long-term prosperity, or even survival, of several programmes. The Rolls-Royce Trent 500-powered Airbus A340-500/600 and General Electric GE90- powered Boeing 777-2O0LR have become the immediate victims of delays, while longer term casualties could include the BR715-powered 717-200. Established fore casts have become meaningless overnight, and major re-evaluations of mid- to long- term prospects are under way. While many, such as R-R and Honeywell, believe long-term trends remain unaffected, others see fundamental shifts taking place. All expect renewed emphasis to go into repair, overhaul and maintenance strategies, as well as upgrades. Hope for growth While the North American airline market is bearing the brunt of the collapse, the region may also lead renewed growth in the business jet market, which many predict will be one of the few beneficiaries of the attacks. It is not only fear of commercial flying and higher insurance costs that are expected to drive this growth, but also the impact of higher lev els of security on the time of highly paid executives. The result is cautious optimism from business-aircraft makers, and retrenchment from airliner manufacturers. The engine makers are similarly split, at least in the short- to mid-term. GE, which had already begun planning for a slowdown pre-11 September, drasti cally accelerated its restructuring efforts, and is in the process of laying off 4,000 employees, or 13% of its global workforce. Cuts in Pratt & Whitney announced reductions of A340-500/ 2,500, or around 8% of its workforce, while 600 sister company Pratt & Whitney Canada production plans to axe around 600. Honeywell's will affect engine workforce, having just escaped dras- the Trent 500 tic rationalisation as part of the abandoned market GE merger, is set to shrink by around 500. R-R, exposed across a broad front, appears to be worst hit. Predicting 30% fewer civil engine deliveries next year than previously expected, it plans to lay off almost 5,000 - or 17% of its 28,000 employees worldwide. Of this total, 1,200 jobs will go at the for mer R-R BMW operations in Germany and the former Allison plant in Indianapolis. Follow-on cuts in the engine-maker supply chain are under way, with TRW Aeronautical Systems axing 1,100 jobs, Hamilton Sundstrand cutting 1,500 and Goodrich planning similar reductions. China's immunity In the longer term, signs of continued growth, although at a slower or delayed pace, appear consistent for both narrow- body and widebody types. China has once again shown itself to be immune from the international situation, placing orders for Next Generation Boeing 737s within weeks of the attack and actively discussing regional jet programmes with all-comers. Despite the odd bright patch, however, the airframe outlook is much gloomier than before 11 September. Airbus is slow ing growth to planned deliveries of around 345 aircraft next year, as opposed to the 400 originally scheduled. Boeing is suffer ing to a much greater extent, and expects www.fliqhtinternational.com FLIGHT INTERNATIONAL 13-19 NOVEMBER 2001 65
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