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Aviation History
2002
2002 - 2774.PDF
BUSINESS FORECAST ICAO sees zero growth in air travel The International Civil Aviation Organisation (ICAO) expects zero growth in air travel this year, but says that a recovering world economy should end the two- year slump in passenger numbers and trigger strong growth in 2003 and 2004. ICAO last week revised its estimates of passenger num bers downwards for 2001 and 2002. Overall, the agency expects to see a 2.9% drop in passenger traffic last year, and no growth this year. In its last set of forecasts, made in 2000, it predicted 5.5% and 5.3% growth respectively. Air traffic normally rises at around double the rate of world gross domestic product growth. Last year was not the first time it has fallen, as fear of an Iraqi terrorist attack in 1991 caused traffic to fall slightly, but 2001-02 will be the longest period without net growth in traf fic since the Second World War. "Assuming continuation of restored consumer confidence," the agency says, traffic should return to 5% global annual growth to 2010. Growth will be fastest in the Asia-Pacific region, maintained at around 7%. Slowest growth will be in North America, but the area will still account for roughly a third of world air travel by 2010. RESTRUCTURE MARY KIRBY / WASHINGTON DC BWIA considers drastic action to remain afloat Labour disputes and downturn could force fleet, schedule cuts and Heathrow slot sale Financially struggling BWIA West Indies Airways is considering a drastic restructuring plan that could see its fleet and schedules slashed and some of its London Heathrow airport slots sold. Trinidad & Tobago-based BWIA, which has been plagued by labour- related flight disruptions all sum mer, says it is reviewing "every aspect" of its business plan. Under consideration is a possible rational isation of its fleet to just two types - Airbus A340s and Boeing 737s. The carrier is also contemplating shutting down its Bwee Express regional operation, which uses three Bombardier Dash 8 Q300s for intra-Caribbean services. The carrier would then rely on LIAT, of which it owns 30%, for regional feed. The carrier admits it may have to sell some of its valuable Heathrow slots. "That is not a decision we've made at this time, but everything is under consideration," says BWIA, which operates seven weekly services to Heathrow. The proposed restructuring plan would see BWIA's fleet of one Airbus A340-300, six 737-800s, three Boeing MD-83s, and two Lockheed L-1011-300s reduced to just the A340 and the 737s. BWIA intends to proceed with orders for one A340-300 and one 737-700. BWIA says it would also like to lease two more 737-800s, but admits it is not in final talks for those aircraft yet. "This is [the plan] in essence, but we may have to adjust the figure and not acquire as many 737s." The carrier was badly affected by the downturn in demand for air travel following the 11 September terrorist attacks and has failed to secure much-needed cost conces sions from it employees. In a summer of discontent, actions by disgruntled union groups have led to costly flight delays and cancellations that have helped put the carrier in the red to the tune of $8.4 million during the first half of 2002. BWIA says its final restructuring plan still needs board approval, but it hopes to have everything in place by March. BWIA aims to rationalise its fleet to one A340 and six 737-800s, with orders for one more of each in the pipeline COURT ACTION Air Holland given lifeline A Dutch court has given char ter airline Air Holland another four weeks to find new invest ors and avoid bankruptcy. European air traffic control agency Eurocontrol started court action against the airline for unpaid bills of €1.2 million ($1.2 million). An earlier court ruling gave Air Holland until 11 September to pay. The air line's debts to another carrier, Delsey Airlines, were con verted in a debt-equity swap. IN-FLIGHT ENTERTAINMENT JetBlue to purchase IFE provider US low fares carrier JetBlue Airways has secured enough capital to avoid a secondary share offering and acquire in-flight television ser vice provider LiveTV. The New York-based A320 opera tor posted a monthly load factor of 90.5% for August, becoming what is believed to be the first US carrier to surpass the 90% mark. With almost S300 million cash, JetBlue says it will not hold a secondary offering. It raised $158.4 million in its initial offering. LiveTV, a joint venture between Thales Avionics In-Flight Systems and Harris, was formed in 1999 to provide airline passengers in the USA with in-flight live broadcast television services. The service failed to take off, however, with air lines losing interest in live televi sion and favouring e-mail/internet products instead. JetBlue is LiveTV's only customer. Alaska Air lines had expressed interest in off ering the services, but failed to introduce them; Legend Airlines of fered the service briefly before it collapsed; and Frontier Airlines has failed to convert a memorandum of understanding to an agreement. JetBlue will purchase LiveTV for $81 million, including $41 million in cash and repayment of LiveTV's $40 million debt. The deal is due to be completed in the fourth quarter. Included is $30 million worth of hardware installed on JetBlue's fleet. JetBlue says the acquisition will provide direct control of "this important part of the JetBlue prod uct", but also ensures the survival of the business. LiveTV will be a wholly-owned subsidiary. 26 17-23 SEPTEM8ER 2002 FLIGHT INTERNATIONAL www.flightinternational.com
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