FlightGlobal.com
Home
Premium
Archive
Video
Images
Forum
Atlas
Blogs
Jobs
Shop
RSS
Email Newsletters
You are in:
Home
Aviation History
2002
2002 - 0920.PDF
BUSINESS RESULTS ALEXANDER CAMPBELL / AMSTERDAM Poor outlook hits EADS credit rating Fewer Airbus deliveries will bring down revenues in 2002 - but defence income expected to climb European aerospace group EADS has ruled out cutting staff despite predictions of falling revenues and a net loss in 2002. Most of its €30.8 billion ($27.3 billion) revenues in 2001, as in pre vious years, came from its 80% stake in commercial airframer Airbus: €20.5 billion. Airbus sales accounted for almost all its earn ings before interest payments and tax (EBIT), €1.66 billion out of €1.69 billion. The release of EADS' results on 18 March led credit rating agency Moody's to downgrade the aero space giant from A2 to A3. Although still "investment grade", this lower rating reflects the poor prospects for Airbus. The A380 ultra-large airliner project will con tinue to demand billions in research and development costs, and orders for current types will probably remain low until 2003 at least, according to the agency. EADS revenues are forecast to fall slightly this year, again mainly due to Airbus. Early last year, Airbus had expected to deliver 400 airframes in 2002, but since the airline crisis this forecast has dropped to 300, com pared with 325 actual deliveries in 2001. This will produce a 2% drop in EADS revenue - to €30.2 billion - and a net loss over the year. Not only is Airbus selling fewer aircraft, but a company source suggests it is cutting prices dramatically, offering aircraft at more than 40% below book price. The difficult commercial market Most of EADS' €30.8 billion revenues in 2001 came from Airbus has seen Airbus step up customer financing efforts as it normally does in downturns (Flight Inter national, 12-18 February 2002). It reduced exposure from €3.8 billion to €3.5 billion in 2001, but that is set to rise to €5.3 billion this year as Airbus tries to keep customer loyalty and support deliveries. Chief executive Philippe Camus says it is "still too soon to have a precise view of the evolution of our business, especially past 2003". Co-chief executive Rainer Hertrich predicts that production of the Eurofighter Typhoon will help defence revenues increase further, from their 2001 level of €6.1 bil lion to €9 billion by 2004. Although the group's defence busi nesses made an overall loss in 2001, they broke even in the sec ond half of the year. Hertrich says EADS will not be acquiring any other companies, specifically I'airchild Dornier. OWNERSHIP HILKA BIRNS / CAPE TOWN Air Namibia works new strategy Air Namibia's new owners intend to finalise a business plan next month after part-privatisation of the ailing carrier by the Namibian government. Air Namibia, which has a debt of N$1.4bn ($123 million), is expected to post a loss this year of N$521 million. The Namibian government has approved the restructuring, which will see regional airline South African Airlink paying cash for a 40% stake, privately owned Namibian aviation company Comav acquiring 15%, trade union group Labour Investment 10% and employees 10%. The state will retain 25% (Flight International, 19-25 March). South African Airways will become a 4% shareholder through its 10% stake in SA Airlink. The government will absorb the debt. Board chairman advocate Vekuii Rukoro says a three-person transi tional executive team, representing the board, labour interests and SA Airlink and Comav, will take over management of Air Namibia from 1 April until the business is transferred to the new company on 1 July. The board had found "a total mess and chaotic situation" at the airline, says Rukoro. The new business plan is likely to include replacement of the airline's Boeing 747-400 Combi and a partnership with another airline on its only international route, Windhoek to Frankfurt. Air Namibia also has two Fokker F28s, one Boeing 737-200 leased from Safair and two EADS/lndonesian Aerospace CN235s. SA Airlink, which owns stakes in regional airlines in Swaziland, Zambia and Zimbabwe, recently grounded three of its BAe Jetstream 41s and laid off pilots after the global aviation slowdown, a 40% drop in the value of the rand and an increase in fuel and insurance costs. In 2000, SA Airlink committed to 20 Embraer ERJ-135s plus options on 30 larger 170s. Chief executive Rodger Foster says SA Airlink will delay deliveries until conditions improve and the future of the Yamoussoukro declaration, which calls for liberalisation of air services in Africa, is better understood. Air Namibia could receive some of the ERJ-135s. CONSOLIDATION China Eastern acquires stake in Wuhan Airlines China Eastern Airlines is to take a 40% stake in Wuhan Airlines as it seeks to expand its domestic mar ket reach amid sweeping consolida tion in the country. The Shanghai-based carrier, one of China's "big three", will acquire the stake by establishing a new joint-venture carrier - China Eastern Airlines Wuhan. Wuhan Airlines itself will hold 40%, while Shanghai Junyao (Group) will hold 18% and Wuhan High-technology Holding Group will take 2%. China Eastern says the company will be capitalised at 700 million yuan ($85 million). Wuhan Airlines will acquire its stake by injecting assets, whereas the three other shareholders will put up cash. The Civil Aviation Administra tion of China (CAAC) has already approved the deal, China Eastern says, paving the way for final nego tiations that will begin to firm up an agreement. Wuhan operates eight Boeing 737-300s and -800s, as well as a handful of Xian Y-7s. After comple tion of the deal, the carrier will cease to exist in its own name and will instead operate under the China Eastern brand. The CAAC has been calling for consolidation among the country's 30-plus airlines for years. Under a revamp approved by the Chinese government earlier this year, majors Air China, China Eastern and China Southern Airlines will acquire seven other CAAC-controlled airlines, creating three mammoth groups, each with around 50 billion yuan in assets and around 150 aircraft (Flight International, 12-18 February 2002). 28 26 MARCH - 1 APRIL 2002 FLIGHT INTERNATIONAL www.flightinternational.com
Sign up to
Flight Digital Magazine
Flight Print Magazine
Airline Business Magazine
E-newsletters
RSS
Events
