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Aviation History
1986
1986 - 0395.PDF
1 ) Arrow Air files for protection MIAMI Arrow Air has filed for Chap ter 11 protection from its creditors under US bank ruptcy law. The carrier has been beset by problems since the DC-8 crash at Gander last December which killed 248 US Marines, but claims it has received rough justice. The US Air Force has suspended its contracts with the Miami-based carrier. Ten days ago the FAA grounded Arrow's ten DC-8s after find ing uncertified spare parts had been installed. Arrow says the FAA action was "totally incomprehensible" and that use of these parts is common practice and generally FAA approved. It agreed to change ike parts and had three aircraft back in action almost immediately. The airline says it filed for bankruptcy on four counts: Firstly, "the determination of the Congressional committee to prejudice the outcome of a Canadian investigation into the crash"; secondly, the "unwarranted announce ment" by the FAA; "adverse media and news coverage affecting advance bookings on scheduled and charter flights"; and finally "pressure on the Pentagon from Congress to suspend all military contracts". Arrow is still operating cargo and charter services using 100 of its 500 employ ees. The other 400 have been laid off pending reor ganisation. Arrow's fleet consists of the ten DC-8s plus two 747s. It began flying cargo in 1981 and commenced passenger service the follow ing year. UTAto manage Air Zaire BRUSSELS The French airline UTA has taken over management of Zaire's national airline Air Zaire, which has been in seri ous financial trouble for a long time. Talks had also been held with Sabena, the Belgian national airline, which tradi tionally has close ties with the Zaire airline. Air Zaire grew out of Sabena's Congo oper ations after the country's independence in 1960. UTA takes over manage ment on February 1, 1986, under management by Joeil de Cernon of UTA who has been appointed adminis trator-general of Air Zaire. Former Zaire director-general Geyoro te Kule has now been appointed president of the Board. UTA is not investing any money in Air Zaire, according to de Cernon, and it will not pay Air Zaire debts. According to some sources, accumulated losses of Air Zaire would be about $48 million. Air Zaire has a fleet includ ing one McDonnell Douglas DC-10, three Boeing 737s, four Fokker F.27 Friendships, and two DC-8s. Of the Fokkers only one is airworthy, and only two of the Boeing 737s are in flyable condition. Last year one of the original two DC-10s was sold for $25 million, but the money was paid to the Zaire Government and not to the airline. The new management now intends to sell the remaining DC-10 to a banking group and lease it back. Already the number of airline staff has been reduced from 6,500 to some 2,000. Many of them have not been paid for some time. The Zaire Government has paid salary arrears for foreign staff, most of them Belgians and French men. In order to bring person nel costs down, Air Zaire had already decided to reduce the number of expatriate pilots. The DC-10 is being used for two scheduled flights weekly between Kinshasa and Brussels. Arrow's military contracts are temporarily suspended, it says, pending an FAA report on spare parts used in its DC-8s AIR TRANSPORT NEWS SCAN Sabena made record profits in 1985 of Bfr 1,200 million ($24 million). It has clocked up losses since 1957 and only came out of the red two years ago. Staff cutting and raising the company's equity to ease its debt burden contributed to the improved results. Sabena sold and leased back two 747-100s during the year, free ing about $40 million in capi tal which went into a fund for a new 747-300 to be delivered in June. Small, if any, increases in airport charges were the norm for 1985. According to a Lloyd's Aviation Economist report "even airports that normally revise their charges annually such as Tokyo and Amsterdam, implemented no increases". Highly congested airports, such as London Heathrow and New York's airports, pushed up their peak charges. Over the year the gap widened between Tokyo as the most expensive and Kuwait and Los Angeles as the cheapest major airports, largely through variations in US dollar exchange rates. British Airways will install telephones in three of its 747s in 1987 for a trial period. Air France announced an 18 per cent rise in short-haul demand on its Brussels-Paris route. As a result Air France and Sabena, who operate the service jointly, have increased frequency to five times a day. USAir Group recorded an 8-3 per cent rise in 1985 oper ating revenues to $1,765 million. Net earnings were slightly lower at $117-1 compared with $121 • 6 million in spite of gaining $13-6 million from a change in pension expense accounting methods. Fourth quarter net earnings were up by 9 per cent at $31-6 million on revenues of $437 million. USAir Group owns USAir, Pennsylvania Airlines, and USAir Leasing. Singapore's Civil Aviation Authority is seeking rights to South America and Africa. Talks are also under way with Spain. Recent negotiations with India resulted in Sing apore Airlines gaining rights to Delhi and Calcutta and additional flights to Bombay and Madras. FLIGHT INTERNATIONAL, 22 February 1986
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