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Aviation History
2004
2004-09 - 2418.PDF
& ADVERTISER CONTACTS - P64 EDITORIAL +44 (20) 8652 3842 Quadrant House, The Quadrant, Sutton, Surrey SM2 SAS, UK Fax +44 (20) 8652 3840 email flight.inteniatioiial@rbi.co.uk Editor Murdo Morrison +44 (20) 8652 4395 murdo.morrisoti@rbi.coMk Editorial Assistant Andrew Costerton +44 (20) 8652 3835 andren.costerton@rbi.co.uk News Editor Andrew Doyle +44 (20) 8652 3096 andretn.doyle@rbi.co.uk Commercial Aviation Editor Max Kingsley-Jones +44 (20) 8652 3825 max.kingsley.jones@rbi.co.uk Defence Editor Craig Hoyle +44 (20) 8652 3834 craig.boyle@rbi.co.uk Operations/Safety Editor David Learmount +44 (20) 8652 3845 david.learmount@rbi.co.uk Business & General Aviation Editor Kate Sarsfield •44 (20) 8652 3885 kate.sarstield@rbi.co.uk Senior Reporter Justin Wastnage +44 (20) 8652 3i63justin.wastnage@rbi.co.uk Technical Reporter Rob Coppinger +44 (20) 8652 3843 rob.coppinger@rbi.co.uk Associate Editor (Defence) Peter La Franehi +61419 246 620 Fax +61 (2) 62312795 nutka@ozemait.com.au Spaceflight Correspondent Tim Furniss +44 (1237) 477883 tim@spaceport.co.uk Senior Technical Artist Giuseppe Picarella +44 (20) 8652 8054 joe.picarella@rbi.co.uk Editorial Artist Tim Brown +44 (20) 8652 8043 tim.brovin@rbi.co.uk EUROPE/MIDDLE EAST Israel Correspondent Arie Egozi +972 (3) 9413132 Middle East Correspondent Gerald Butt Russia Correspondent Vladimir Karnozov mr00079@east.ru AMERICAS Washington DC Office Fax +1 (703) 836 6344 Americas Editor Graham Warwick +1 (703) 836 3448 graham.wamick@rbi.co.uk East Coast Editor Stephen Trimble +1 (703) 836 3084 stephen.trimble@rbi.co.uk West Coast Editor Guy Norris +1(949)2528971 Fax+1 (949) 252 8972 guy.norris@rbi.co.uk Brazil Correspondent Jackson Flores Jr •55 212439-6062 Fax +55 212349-6090 fubar@uol.com.br Canada Correspondent Brian Dunn ASIA/PACIFIC Singapore Office Fax +65 6789 7575 Regional Managing Editor Nicholas lonides +65 6780 4311 nicbolas.ionides@rbi.co.uk Deputy Asia Editor Brendan Sobie +65 6780 4309 brendan.sobie@rbi.co.uk Regional Reporter Leithen Francis +65 6780 4314 leithen.francis@rbi.co.uk Australia Civil Aviation Correspondent Emma Kelly •61 (8) 9454 4987 emmajkeily@bigpond.com COMMENT EDITORIAL PRODUCTION Group Production Editor Graeme Osborn +44 (20) 8652 3828 Group Art Editor James Mason +44 (20) 8652 4994 Chief Sub-Editor Chris Thornton +44 (20) 8652 4997 Deputy Production Editor +44 (20) 8652 3850 Sub Editor Simon Rees +44 (20) 6652 3848 Photographer Mark Wagner +44 (20) 8944 5225 WWW.FLIGHTINTERNATIONAL.COM Webmaster Sheena Buchanan +44 (20) 8652 4432 webmaster@flightinternational.com SUBSCRIPTIONS +44 (1444) 445454 rbi.subscriptions@rbi.co.uk THE FLIGHT COLLECTION kim.hearn@rbi.co.uk © and Database Rights 2004 Reed Business Information Ltd. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or'by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the publishers j« -—-—^Mtm, AvSoft, part of The Flight Group, is a producer of JHft/§Qp| computer-based aviation market information systems and safety management software. Tel: +441788 540898 email: sales@avsoft.co.uk www.avsoft.co.uk /1-r' / Air Transport Intelligence (ATI), Flight International'ssister j~\] J online service at www.rati.com, contains the full text of Flight '•"••- —•• International mi Airline Business since 1996. Full text of the magazines can also be found online with Lexis-Nexis, Dialogue, FT Profile, IAC and Reuters. Editor Kieran Daly +44 (20) 8652 3837 Reed Business Information Best left alone Industry on both sides of the Atlantic would be happier if politicians played less of a role in its affairs The French have a phrase for it: laissez faire, which literally means to "let do", but which also describes the doctrine that government should not interfere in commercial affairs - or "leave it alone", in other words. European industrialists would probably prefer it if French politicians would leave it alone, and stop their efforts to arrange a marriage between EADS and Thales. And both Boeing executives and US Air Force officials probably wish US politicians had left things alone in the wake of the 11 September 2001 terrorist attacks. Three years ago, when a group of US sen ators prodded the US Air Force to look at leasing 100 Boeing 767s to serve as aerial- refuelling tankers, who could have guessed the result? What was intended as a post-9/11 lifeline to Boeing now ranks among the Pentagon's most disastrously botched acquisi tion efforts, not only failing to produce a deal after three years, but also raining personal ruin Creating a heavier gorilla is pointless unless its cage is made bigger on nearly everyone connected to it. What other programme can lay claim to toppling Boeing's chief executive and chief financial officer and three of the US Air Force's most senior civilian officials, including, finally, the deal's architect and most ardent apologist - secretary of the air force James Roche? There can be no more graphic illustration of the dangers of unintended consequences when politicians interfere in commercial affairs. While French finance minister Nicolas Sarkozy's dream of engineering a merger between Thales and EADS would create the industry's biggest player, and be a quick fix for the European aerospace giant's anaemic defence portfolio, it is almost certain to have unintended consequences. First and foremost it promises to upset the careful balance of French, German and Spanish interests on which EADS is built, with Germany already concerned at the prospect of France holding more than half of the merged company. Secondly, combining Europe's biggest and third-biggest aerospace players would reduce competition. This would be unpopular in the UK, particularly if BAE Systems responds by merging with one of the big three US primes, further reducing competi tion in this most open of defence markets. Thirdly, consummating a marriage with Thales would draw EADS's focus back into Europe just as it is poised to realise its dream of penetrating the US defence market, thanks to the US Air Force tanker debacle. However unlikely the USA buying Airbus A330 tankers may appear, if a competition is held EADS will almost certainly be invited to bid and the transatlantic competitive landscape could be changed forever This may not be the best time to divert the attention of EADS's leadership, or from a US viewpoint to increase the French government's shareholding in the company through a merger with Thales. But perhaps the biggest concern about an EADS/Thales merger is that the companies will fare little better together than apart if the European defence market place is not consolidated at the same time. Creating a heavier gorilla is pointless unless its cage is made bigger. And that is a job for the politicians. But in doing so, they should take a wary look at the US experience of allowing a mega-company to gain dominance within a monolithic procurement system. The Druyun scandal has its roots in the tight US military-industry symbiosis: politicians wielding their power over military funding to help commercial companies; and defence offi cials using their power over procurement to secure civilian jobs. There is no end yet to the consequences, the scandal having touched off continuing investigations and lawsuits cover ing almost every major acquisition made by the US Air Force since 1992. More than a year after the first conflict-of- interest charges, it is possible the scope of the scandal has only just begun to unfold. Roche's departure could be a sign the USAF is ready to co-operate with the US Senate's demands for full disclosure and full accountability. Publicly, Boeing maintains the matter has been settled with the guilty plea of former CFO Mike Sears. But the last casualty of this affair is unlikely to be known for months, if not years. What is clear is that Boeing, the global aero space industry's biggest player, has been damaged by the unintended consequences of the political interference in commercial affairs that started this chain of events. French finance minister Sarkozy may want to boost his chances of becoming France's next president by forging EADS and Thales into the industry's number one company, but he would to well to heed his own language and say laissez faire. SEE HEADLINES P6 AND BUSINESS P32 www.flightinternational.com FLIGHT INTERNATIONAL 23-29 NOVEMBER 2004 5
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