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Aviation History
1971
1971 - 0685.PDF
600 AIR TRANSPORT... UNITED ARAB PLANS A FIRM decision has yet to be taken by United Arab Airlines on the choice of a medium-range jet to replace its withdrawn Comet 4s. But although both the Boeing 727 and the Tu-154 have been considered, the Minister of Aviation, Mr Ahmad Nuh, indicated that the terms offered by the Soviet Union were attractive enough to make the Tu-154 preferable. He mentioned in particular low interest rates on Soviet finance, easy repayment terms and ample training facilities. Reports that UAA has ordered the Tu-134 have not yet been officially confirmed, but a technical committee to co-ordinate facilities for the introduction of the type was set up on April 5. In the meantime the airline is to wet-lease two Il-62s from Aeroflot under an agreement believed to have been concluded during a visit by the UAA director- general, Mr Mustafa Afifi, to Moscow in mid-April. Meanwhile it was expected that the Comet fleet might be put back into service in late April or early May. The aircraft were withdrawn after an accident at Tripoli on January 2. US Census A new edition of the Census of US Civil Air craft has been published by the FAA. The document is correct as of December 31, 1969, and may be obtained from the Superintendent of Documents, US Government Printing Office, Washington DC 20402. The price is $1 • 50. Skyways International carried 7,300 passengers during the Easter holiday period with a load factor of 75.8 per cent. The company is successor to Skyways Coach Air, now in liquidation, and only began operations—following the latter's period of receivership—on February 8, a day on which there were only five fare-paying passengers. FLIGHT International, 6 May 1971 KLM goes Dutch KLM will be operating its own DC-8s on the trans^Siberia route from April 2, 1972, according to Mr J. Luymes, executive vice-president of the airline. He was speaking at an interview in Tokyo after the first KLM flight across Russia on April 6. For the time being KLM is using leased Aeroflot Il-62s with Soviet flight crews and KLM cabin crews. Conversion of Trident Is and 2s to take Garrett GTCP 85 APUs in place of Rolls-Royce-built Artoustes should be completed by the spring of 1972. The work is being done w± by BEA and is not affected by the Rolls-Royce situation. The contract is worth about £700,000 to Garrett, whose units are already installed in BEA One-Elevens and Trident 3s. Pomair is the new name of the Belgian airline Trans- pommair of Ostend. The company was last weekend due to begin operating a DC-8-33 acquired from Pan American; it also has three DC-6Bs, two of them leased from Fracht- flug of Iceland. Pomair is now owned one-third each by van Hool & Co, a Belgian lorry and bus constructor, M Charles Pomme, who has road-haulage interests in Belgium, and the Boreas Corporation of Miami, Florida. (The airline is listed under its earlier name in the World Airline Survey, on page 649 of this issue.) Fourth New York S-61 Services with a fourth S-61L acquired by New York Airways were due to begin on May 3. It will be used to expand the half-hourly services between Kennedy, LaGuardia and Newark airports to 1 include Manhattan and Morristown, New Jersey. Direct » services from the Wall Street heliport to Kennedy and LaGuardia, and between Morristown and Wall Street, will be provided. About 300,000 passengers used the inter- airport services in the first year of operation with S-61Ls, which began flying the routes in March 1970. Reporting Points Air Canada In whichever language you read this bilingual report, Air Canada turned in a marginal loss in 1970, the first since 1962 (although 1969 was only just in the black). Revenue went up 18 per cent to C$478 million (£194 million) but, eliminating the effect of a 1969 strike, estimated growth was around 6 per cent. Overall load factors at 57 per cent and yield per passenger mile stayed constant at 5-8 cents. The main turnover growth took place in the charter market—up 77 per cent but still only 3 per cent of total revenue; on a geographical basis, the scheduled North Atlantic traffic was up 42 per cent. It would seem that the North American domestic tariff, which covers some 35 per cent of the total available capacity, is the most difficult profit area. The management also draws attention to the softening of the Canadian economy in 1970 with a GNP increase of 3 per cent and a price increase of 3-5 per cent. (Some countries would be pleased with that.) In common with other major carriers, Air Canada's operating expenses also went up by 18 per cent but they managed to reduce operating cost per available ton-mile by nearly 4 per cent to 22-27 cents; employee costs accounted for 42 per cent of the total. At year-end the fleet comprised 38 DC-8s, 36 Dc-9s, 12 Vanguards and 31 Vis counts, with three 747s to be delivered in 1971 and ten Lockheed TriStars later on; utilisation, owing to recent acquisitions, has decreased to a daily 7-29hr from the palmy 8-38 of 1967. The profit-and-loss account itemises the operating expenses, and these all show substantial percentage increases; but the highest, 31 per cent, is on the smallest division, general and administrative. Interest charges on the debts for 1970 were up 26 per cent to $31-9 million (£12-9 million); after adjustment for a credit for income taxes, retained earnings increased to $32-7 million (£13-2 million) from $27-7 million (£11-2 million). Incidentally, by adding back net interest expense for the year to net income after tax, Air Canada shows a return i on investment of 4-5 per cent in 1970, compared with 4-8 per cent last year. This is not a particularly relevant figure unless the management declares its target return on capital invested. The balance sheet is highly geared, in that the issued ( capital is only $5 million (£2-2 million); the remainder , has been found from or guaranteed by the Canadian Government, with only a small quantity on the market. Notes and debentures total $548 million (£222 million) and mature from on-demand upwards as far as 1987 at rates of interest from 3 • 5 per cent to 7 • 6 per cent, all of which appear to be reasonably attractive in today's money market conditions. The largest tranche is $143 million *" (£58 million) on six-month revolving credit; in the balance- 1 sheet notes, it is recorded that notes and debentures are customarily renewed on maturity. Contingent liabilities include annual long-term lease ' rentals of $7-8 million (£3-2 million); for aircraft on order,J some $218 million (£88 million), after deduction of pro- j gress payments of $126 million (£51 million); and for ground equipment on order, another $43 million (£17 mil-' lion). There is also recognition of the growing need to sell* travel on credit—still only a mere $3 million (£1-2 million).. Assets consist mainly of aircraft, which, with ground facilities, after depreciation, are valued at $454 million' (£184 million). Aircraft are written down on a straight-line, basis to an estimated residual, which apears to be con servative as the recent disposals resulted in a small' surplus; with progress payments, fixed assets total, $580 million (£235 million). Apart from deferred charges and an investment totalling together $26 million (£11 mil-' lion), the remainder shows current assets of $103 million (£42 million), almost equalling current liabilities. Even when backed with the full Government resources,) Air Canada has got its work cut out to show a return. Nevertheless, its move into the charter markets, the cost' improvement and higher utilisation will help to push backt its figures into the black again. ,
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