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Aviation History
2002
2002 - 1730.PDF
BUSINESS PRIVATISATION Cabinet sets ADC deadline Taiwan's Cabinet has passed a bill setting a strict December 2003 deadline for the privatisa tion of struggling aviation manufacturer Aerospace Indus trial Development Corp (AIDC). "The Cabinet set us a clear target," says Mike Lee, director of AIDC's executive office. The bill listed five potential buyers: Chiao Tung Bank, China Development Bank, the National Defence Industry Development Fund, the Yau Hua glass com pany and the China Aviation Development Foundation. AIDC's previous privatisation attempts stalled and the com pany had to abandon a risk-sharing role in the Airbus A380 due to a lack of capital. Since building the last of 130 Indigenous Defence Fighters in 1999, AIDC's revenue has shrunk from about $750 million a year to less than $300 million. Sources say it is losing about $60 million a year. Most risk-sharing ventures are several years from profitable production, including cockpits for the Sikorsky S-92 helicopter, empennages for the Bombardier Continental business jet and wings for the Aero Vodochody AE270 turboprop. AIDC needs about NT$900 million ($26.5 mil lion) to stay afloat, says Lee. ALLIANCES NICHOLAS IONIDES / SHANGHAI Three more airlines to join expanding Star Alliance Grouping set to become 17-strong, but still courts partners in Australia and China The Star Alliance will have a mem bership base of 17 carriers within a year, after Asiana Airlines, LOT Polish Airlines and Spanair were approved this month as partners. The alliance is meanwhile con tinuing to seek a partner in China and is looking to build its presence in Australia after the September collapse of then-member Ansett. Star's chief executive board approved the entry of the three new airlines in Shanghai on 1 June. It is expected they will join "within the next six-12 months". Polish national carrier LOT had been preparing to confirm member ship in Star for some time (Flight International, 7-13 August, 2001). Formerly a member of now-defunct Swissair's Qualiflyer alliance, it signed a codeshare agreement with Lufthansa this year. Spain's Spanair, controlled by Star member Scandin avian Airlines, had also been seen as a Star candidate for some time. Confirmation that Asiana will join Star comes after years of study ing Star and the rival Oneworld grouping. Star member All Nippon Airways has been urging it to take a place for more than two years. The South Korean carrier has a fast-growing international network that includes an increasing number of routes to China. Asiana also has strong ties to Chinese majors Air China, China Eastern Airlines and China Southern Airlines. Since its establishment five years ago, Star has sought a member in China and says it expects Air China to join eventually. Star is not dis closing plans for Australia. Ansett's collapse last year left it without a partner in Australia and One- world's Qantas is the only major international carrier in the country. Many expect Star member Singapore Airlines to venture into Australia by establishing a carrier there. Deputy chairman and chief executive Cheong Choong Kong said in Shanghai that he does not want to "do Qantas a favour" by revealing his plans. Another way for Star to re-estab lish itself in Australia is through member Air New Zealand (ANZ), Ansett's former owner. The situa tion is complicated by the fact that Qantas is in talks to take a stake in ANZ. If talks succeed, ANZ would have to leave Star. Air China, which has strong Asiana links, is expected to join Star one day SATELLITE MANUFACTURE GRAHAM WARWICK / WASHINGTON DC Loral may enter Lockheed Martin's space orbit Manufacturing overcapacity and depressed demand could lead Lockheed Martin and Loral Space & Communications to combine their commercial satellite opera tions. While the two companies decline to comment on a Wall Street Journal report that they are discussing a joint venture, the move would address concerns about profitability in their satellite manufacturing businesses. Lock heed Martin already holds a 13% stake in Loral. Consolidation among the five major European and US communi cation satellite manufacturers seems increasingly likely, with sales of large geostationary orbit (GEO) commercial communications satel lites expected to fall below 20 this year, from a recent average of 30 a year. Operators have delayed capital investments because of the uncer tain economy and the slow develop ment of the broadband data market. A joint venture between Lock heed Martin and Loral would cre ate a stronger second player behind GEO market leader Boeing. Space Systems/Loral (SS/L) is already the second largest manufacturer, with 20-25% of the market and 19 satel lites on backlog, while Lockheed Martin Missiles & Space has just seven commercial satellites in its backlog. Boeing Satellite Systems says two-thirds of the 36 satellites it has in backlog are for commercial customers. Orders have been scarce this year, but are expected to pick up as the economy recovers. All three US manufacturers have restructured to reduce costs. SS/L cut its workforce 11% by the end of last year and Lockheed Martin will have shrunk its satellite manufac turing workforce 6% by the end of this year. In February, Boeing's satellite unit announced plans to cut 1,150 jobs, 11% of its work force, but this rose to 2,000 in April and could total 2,500 by year-end. Loral says SS/L's factory is full, with 20 satellites under construc tion, but Lockheed Martin has struggled with overcapacity since gearing to build large numbers of low Earth orbit satellites, a market which collapsed with the failure of Iridium. While GEO operators remain healthy, they are not plac ing orders. Loral says the 260 commercial geosynchronous satellites in orbit should generate a market for around 20 replacements a year, and expects more orders by 2003. 20 11-17 JUNE 2002 FLIGHT INTERNATIONAL www.flightinternational.com
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