Aerospatiale has posted a dramatic turnaround in its financial fortunes during 1996, which president Yves Michot says will strengthen the group's hand as it prepares for major structural changes including the forthcoming merger with Dassault Aviation and the restructuring of Airbus. The manufacturer also reveals that it is involved in talks with Lockheed Martin.
The encouraging results mark the end of a long-running restructuring which has seen the group struggle with heavy losses as it put aside billions of francs to cover workforce cuts.
"At last we are able to negotiate from a position of strength, with a strong orderbook and constantly improving finances," says Michot. Orders were up by 61%, swelling the booming civil markets at Airbus and pushing Aerospatiale's order backlog up to Fr119 billion ($22 billion) - "worth 2.4 years of work", says Michot.
Stringent cost controls helped the group to halve virtually its debt to end the year at Fr3.5 billion, leaving the state-owned company with a positive debt-to-equity ratio for the first time this decade.
Final profit figures have not yet been released, but Michot, who took over in August from Louis Gallois, the architect of much of the restructuring, says that net profits will be near to double those for the first half, at around Fr540 million. "We expect an even better year in 1997,"he adds, because of increased production for Airbus and Arianespace, as well as industrialisation of the Franco-German Tiger anti-tank helicopter.
By the time Aerospatiale faces privatisation, now unlikely to be before 1998 at the earliest, the merger with Dassault will be complete and debt should effectively have been wiped out. A successful privatisation of Thomson-CSF is also awaited, one source noting that there might be a "definite possibility" of the combined group taking an interest in the defence-electronics manufacturer.
Michot admits, however, that the stalled attempt to merge Aerospatiale's missiles and space businesses with those of Daimler Benz Aerospace are effectively "frozen", not least because of the German Government's reluctance to commit to financing its share of the French-sponsored Helios observation satellite programme.
He stresses that the restructurings of Aerospatiale and Airbus are being "spurred" by the emergence of USgiants, in particular the shortly-to-be-merged Boeing and McDonnell Douglas.
Michot is due for a second meeting with Lockheed Martin's president, Norman Augustine, in February, for discussions aimed at securing the USmanufacturer as a risk-sharing partner in the 550-seat A3XX programme. Airbus involvement in the competition to replace the USAir Force's fleet of refuelling aircraft is also sought.
Sources indicate that the talks also involve the Future Large Aircraft (FLA) programme. The aircraft is in direct competition with the Lockheed Martin C-130J transport, but remains unfunded by the eight partner nations. Aerospatiale, which has proposed a commercial solution to funding the FLA to the French Government, declines to comment on speculation of a turbofan-powered version of the FLA being offered as replacement for the USAF's ageing Lockheed C-141 transport aircraft, or the FLA being scrapped in favour of a new airlifter.
Source: Flight International
