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Aviation History
2002
2002 - 1048.PDF
BUSINESS AIRLINE LAUNCH ALEXANDER CAMPBELL / ZURICH Swiss set to join Oneworld family American Airlines tie-up prepares the way for alliance membership and upgrade of long-haul fleet longer than expected. The need to win agreements with every One- world airline could well delay membership until after the start of the winter timetable, meaning that Swiss would not obtain the full benefits of alliance membership until spring 2003. The airline inherited 52 aircraft from its now-defunct parent Swissair under the Phoenix Plan, including 13 of the airline's 19 Boeing MD-1 Is. These aircraft are on 18 month leases from the banks which own them, and will be replaced over 12 months by 13 new Airbus A340-300s from June 2003. Efforts to resurrect an earlier deal to sell the entire MD-11 fleet to FedEx Express continue. Swiss turned down an offer from Boeing of ex-Singapore Airlines A340-300s, which would have cost around SFr6 million ($3.6 million) Swiss's Saab 2000s are set to be replaced each to convert to Swiss standard, and also rejected the 777-200ER. The former Crossair Avro RJs and Saab 2000s will gradually be replaced by Embraer ERJ-145s, 170s and 195s over the next four years. While Swiss has managed to get higher passenger numbers than it expected in its original business plan, this has been possible only by dramatic fare cuts. Yields, as a result, are 20% below 2000 levels, and likely to remain low for at least the next 12 months. With other airlines adopting ele ments of the successful low-cost strategy, Swiss stands out. It plans to improve inflight services and increase seat-pitch in all classes; it still describes itself as "the highest- quality offer in Europe". Offering this standard of service means that yields will have to increase correspondingly - and while the current downturn means that fleet expansion is unprece- dentedly cheap, Swiss will be going against the trend if it can make a high-quality service profitable by its target of the end of next year. Embraer reports strong results despite last-quarter fall in deliveries Swiss, the new incarnation of the collapsed Swissair and its sister regional carrier Crossair, launched operations on 1 April with a new partnership with American Airlines as the first step towards joining the Oneworld alliance. It will also upgrade its long-haul fleet. However, financial difficulties and labour disputes are still in evi dence, and the industry's continu ing downturn means that chief executive Andre Dose expects low yields for the next year at least. The alliance with American Airlines is awaiting approval from the US Department of Transport ation. However, Dose expects codesharing permission within the next few weeks, leading to a grant of antitrust immunity by the fourth quarter. The partnership is intended to lead to Swiss full accession to the American and British Airways-led Oneworld alliance. However, before this can happen, the new airline will have to sign bilateral agreements with all the alliance members - Dose says this is taking US DEFENCE BOOM Analyst Teal Group estimates the US homeland defence market, which has emerged since 11 September, could be worth more than $45 billion a year from 2003 to 2006. The new Transportation Safety Administration, responsible for airport security, could see the greatest growth, reaching a work force of 50,000 and annual budget of $5.6 billion by 2006. SABENA PROBE The Belgian government has concluded that Sabena's bank ruptcy was inevitable when the airline replaced 28 Boeing 737s with 34 Airbus A320s at a time when its labour costs exceeded its annual income. A parliamentary committee is investigating if Swissair acted fraudulently regarding Sabena. AIRCRAFT MANUFACTURE Embraer has reported strong results for 2001, despite a sharp drop in aircraft deliveries in the final quar ter. Boosted by a 19% devaluation of the Brazilian real against the US dollar, net income increased 36% to $468 million, on net sales up just over 5% to $2.93 billion. The company delivered 161 jets to regional and corporate cus tomers last year, some 45 fewer than originally planned and one less than in 2000. The sharp cut in deliveries after 11 September was felt in the fourth quarter, with net sales falling 25% and net income dropping just under 11%, but mar gins still increased slightly because of currency exchange gains. The Brazilian manufacturer ended 2001 with a net debt posi tion of $23 million, down from a net cash position of $732 million at the end of 2000. This was largely the result of increased customer financing to support deliveries of aircraft and the build-up of inventory as production rates were reduced. Chief executive Mauricio Botelho says about $450 million in interim financing was arranged for customers that were unable to arrange their own financing before delivery. He expects the company's cash position to be restored by mid-year as customers complete financing with third-party lenders and payments begin to come in. Embraer is planning to deliver 135 jets to regional and corporate customers this year and 145 next year, but expects revenues to be maintained close to last year's level by higher business jet shipments, increased defence and services business, and introduction of the larger, 70-seat Embraer 170 regional jet in 2003. Embraer booked firm orders for 60 regional jets and 25 Legacy business jets last year, taking the firm backlog to 364 ERJ-135/140/145s, 112 Embraer 170/190sand68Legacys. Rival manufacturer Bombardier plans to increase regional jet deliv eries in its 2002-3 financial year to 190, from 165 in 2001-2 (Flight International, 26 March - 1 April). 24 2-8 APRIL 2002 FLIGHT INTERNATIONAL www.flightinternational.com
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