[simpits-chat] Fwd: Fw: Flight Safety Information (01JAN03-001) (fwd)

[Gene Buckle]

If you guys are interested, I can post these as I get them.

g.


>Flight Safety Information (01JAN03-001)
>_________________________________
>
>*Comair Pilot Arrested for Knife in Bag
>*Does the FAA have funds to monitor airlines in Chapter 11?
>*United machinists ask court to stop wage cuts
>*United Airlines faces crucial month
>*2 injured in chopper crash in Nagano Pref.
>*Aeroflot to lease eight Airbuses for $313.60 mln
>*Israel's Arkia in leaseback deal with Delta Airlines
>*Australian plane checks cyclone-hit Pacific islands
>*Great Lakes Aviation Announces Financial Restructuring
>*Airbus outshines rival in tough year for aero industry
>*Today in History
>***********************************************
>
>Comair Pilot Arrested for Knife in Bag
>
>HARRISBURG, Pa. (AP) - A Comair pilot was charged with disorderly
conduct
>after federal airport screeners found a knife in his carryon bag, police
>said.
>
>Capt. Rickey L. Mayle initially denied he was carrying a knife, which
was
>detected Sunday by an X-ray at Harrisburg International Airport before
Mayle
>was to board a flight to Atlanta, police said.
>
>A screener searched the bag and found the knife with a 3-inch serrated
>blade.
>
>Mayle, 46, later said the knife had been in his bag since September, and
he
>had forgotten about it, police said.
>
>The FBI was investigating the incident, officials said.
>
>The early morning flight was delayed more than 1 1/2 hours until another
>pilot could be found, Comair spokesman Nick Miller said.
>
>Mayle was released without bail pending a preliminary hearing, police
said.
>He did not return a telephone message left at his home Tuesday.
>*****************
>
>Does the FAA have funds to monitor airlines in Chapter 11?
>
>(The Tacoma News Tribune) - When an airline is in financial distress,
the
>Federal Aviation Administration increases vigilance to ensure that
>maintenance isn't compromised. But with two huge airlines in Chapter 11
and
>the FAA facing criticism for not doing enough to monitor a third, some
>lawmakers question whether the agency is up to the task.
>Rep. John Mica (R-Fla.), chairman of the House aviation subcommittee,
said
>the FAA needs more money to do the job. He also said he may write
>legislation ordering that FAA personnel be shifted to that task.
>
>"There have been many more people killed due to maintenance defects and
lack
>of inspection and oversight than in all the terrorist acts combined in
this
>country," Mica said. "We do have some airlines in deep financial
trouble,
>and it's important we have inspections to make certain they're operating
>safe aircraft and that proper maintenance is adhered to."
>
>The FAA has 3,300 aviation safety inspectors to monitor 139 airlines,
>637,000 active pilots, 273,000 mechanics, 7,600 commercial aircraft,
11,000
>charter aircraft and 220,000 private planes, according to an April audit
by
>the Transportation Department's inspector general.
>
>FAA inspectors analyze data, review paperwork and conduct spot checks of
>airlines' maintenance programs.
>
>Labor unrest, financial problems and rapid growth are among the things
that
>prompt increased supervision.
>
>Many U.S. air carriers have struggled financially since the Sept. 11,
2001,
>attacks.
>
>Major airlines expect to lose about $10 billion this year, according to
Leo
>Mullin, Delta Air Lines' chief executive. And they have cut about
100,000
>jobs since the attacks.
>
>United Airlines, the world's second-largest airline, and US Airways
declared
>bankruptcy this year.
>
>The FAA was faulted by the National Transportation Safety Board for its
>supervision over Alaska Airlines.
>
>Still, FAA spokeswoman Diane Spitaliere said the agency believes it has
>enough people to monitor maintenance at all airlines.
>
>Greg Martin, another FAA spokesman, said the cyclical nature of the
aviation
>business has conditioned the agency to deal with a number of troubled
>airlines at once.
>
>"We've been here before so there's nothing particularly extraordinary
that
>would leave us unprepared," Martin said.
>
>Nonetheless, the bankruptcies have some worried.
>
>"The FAA is stretched pretty thin," said Bill Waldock, professor of
safety
>science at Embry-Riddle Aeronautical University in Prescott, Ariz.
"They've
>had difficulty in responding to a circumstance like a bankrupt airline,
>where there's pressure to cut costs."
>
>Eastern Airlines was fined $3.5 million for falsifying work records on
its
>fleet soon after declaring bankruptcy in 1991. Rep. James Oberstar
(D-Minn.)
>chaired oversight hearings on Eastern, which no longer operates.
>
>"The carriers say they never compromise on maintenance, but there's a
>downward pressure," Oberstar said.
>
>Linda Goodrich, spokeswoman for the union representing FAA inspectors,
said
>bankrupt airlines require much closer oversight. For example, instead of
>simply checking records on how often jet tires are rotated, an inspector
>goes to a bankrupt airline's maintenance facility and personally
examines
>the tires.
>
>She estimates that the FAA needs 500 more inspectors and 100 more
>administrators to do the job right.
>
>"We are so thin, we do minimally what we can do and depend a lot on our
>expertise," said Goodrich, who was an inspector for 20 years.
>
>"We should all be terribly concerned."
>
>Rep. Peter DeFazio (D-Ore.) said he's concerned the FAA feels pressure
from
>Congress and the White House to hold the line on staffing.
>
>"If they're going to do some enhanced on-the-ground surveillance,
they're
>going to have to ask for more personnel," DeFazio said.
>
>Critics say airlines that grow quickly also present problems for the
FAA,
>which hasn't always increased supervision as fast as an airline has
added
>planes.
>
>Alaska Airlines experienced a number of maintenance problems during a
period
>of rapid expansion several years ago. Earlier this month, the National
>Transportation Safety Board blamed faulty maintenance and poor FAA
oversight
>for a January 2000 crash off the California coast that killed all 88
aboard
>an Alaska Airlines jet.
>
>The agency has increased inspectors since then, and the airline improved
its
>maintenance program.
>
>Spitaliere said she doesn't know how many airlines are under heightened
>surveillance now. "We usually don't go into specifics," she said.
>
>But increased oversight doesn't necessarily require more inspectors,
>Spitaliere said.
>
>Bill Bozin, vice president of safety and regulatory compliance at US
>Airways, said he met with FAA officials the day after the airline
declared
>bankruptcy in August.
>
>The airline, which hopes to emerge from bankruptcy early next year,
quickly
>enhanced its internal maintenance oversight, Bozin said.
>
>"We can't allow ourselves to have any missteps," he said. "We realize
there
>is that potential because of the distraction factor that is there."
>
>Hank Krakowski, United's vice president of safety, security and quality
>assurance, met with FAA officials almost immediately after the airline
>declared bankruptcy Dec. 9 to discuss maintenance, according to Chris
>Brathwaite, an airline spokesman.
>
>Pilots, often the first to notice maintenance corners being cut, haven't
>heard of any safety problems at United or US Airways, said John Mazor,
>spokesman for the Air Line Pilots Association.
>*****************
>
>United machinists ask court to stop wage cuts
>
>CHICAGO, Dec 31 (Reuters) - The machinists union at United Airlines on
>Tuesday formally objected to proposed temporary 13 percent wage cuts,
saying
>the bankrupt airline did not provide enough financial data to back up
its
>claim that it needed the cuts to survive.
>
>United, a unit of UAL Corp., filed for bankruptcy Dec. 9 and is seeking
$2.4
>billion in wage cuts annually from its union and nonunion workers. It
has
>warned that without sufficient cost cuts and revenue growth, its lenders
>could pull its special bankruptcy financing, threatening its survival.
>
>Leaders of the pilots' and flight attendants' unions at United have
already
>agreed to temporary wage cuts, buying the airline more time to negotiate
>permanent deals once rank-and-file members approve them. But the
leadership
>of the International Association of Machinists has not done so.
>
>In court papers filed on Tuesday, the IAM said the provision of the
>bankruptcy code that United is using to seek the temporary wage cuts,
known
>as 1113(e), requires specific documentation proving its very existence
is
>threatened.
>
>"The IAM submits that United has not satisfied this heavy burden," the
>filing said. "The evidence, if any, does not establish that the proposed
>reductions are necessary or even appropriate on an interim basis."
>
>MORE CUTS COMING
>
>On its Web site, the IAM also said the proposed temporary cuts are only
the
>first step and that the airline has proposed "additional, more
far-reaching
>permanent proposals."
>
>Executives and union officials at other airlines are closely watching
>developments on the labor front at United, as high costs and weak
revenue
>have led to billions of dollars in losses industrywide since the Sept.
11,
>2001, attacks.
>
>The judge presiding over United's bankruptcy case said he would consider
>both the IAM's objection and United's response on Jan. 10. At that
point, he
>will decide whether the temporary cuts should go into effect or whether
a
>different negotiating process under the U.S. bankruptcy code's section
>1113(c) will kick in.
>
>Meanwhile, during a court hearing Monday about a complicated tax issue
>involving the company's employee stock ownership plan, the airline's
Chief
>Financial Officer said UAL's net operating loss, which is a special tax
>reporting figure only, will total about $3.2 billion for 2002. That is
the
>figure that will be provided to the Internal Revenue Service in about
>February, CFO Jake Brace said.
>
>For the first 11 months of 2002, United has amassed pretax losses of
about
>$2.8 billion, Brace said. He forecast the airline would return to
operating
>profitability in 2004 and return to a net profit in 2005, as outlined in
a
>business plan provided to bankruptcy lenders.
>
>In 2001, the airline's net operating loss for taxable purposes was $2.97
>billion, Brace said, although UAL reported to investors a net loss of
$2.1
>billion.
>
>JUDGE PUTS OFF RULING ON TAX ISSUE
>
>U.S. Bankruptcy Court Judge Eugene Wedoff heard arguments about whether
>State Street Bank, the investment manager for United's ESOP stock,
should be
>allowed to continue selling out of its holdings as it desires.
>
>State Street wants to keep selling stock to preserve some value for
>shareholders. But the airline maintains that policy could could
jeopardize
>the existence of what it estimates are about $5.2 billion in special tax
>assets called net operating loss carryforwards.
>
>Some of the so-called NOLs can also be wiped out when the airline
cancels
>debt obligations as part of the bankruptcy process.
>
>UAL is planning to use the NOLs as a means of boosting future cash flow
once
>it exits the bankruptcy court, Brace said. It has already used about
$2.7
>billion of such NOLs in the past on its tax returns. If State Street
sells
>too much of the employee stock, however, the resulting change of
ownership
>can wipe out the NOLs.
>
>United and the lenders who provided $1.5 billion in debtor-in-possession
>financing consider the NOLs an asset of the estate, critical to
implementing
>the reorganization plan, Brace said. Wedoff will hear additional
arguments
>on the issue on Jan. 15 before making a decision.
>
>Analysts said they were not surprised by the estimated losses at United,
as
>airline industry revenue remains depressed.
>
>"As far as the loss, they lost over $2 billion last year and things have
>gotten worse, so that is not necessarily surprising," said Morningstar
>analyst Nicholas Owens.
>
>"Any talk about profitability is predicated on a return in demand for
air
>travel, basically the economy and business flying, and these factors
won't
>play out until the middle of next year," Owens said.
>
>"I am waiting to see more of a finalized restructuring plan, what we
have
>right now is witnessing some dirty laundry, which doesn't bode well but
>doesn't give any indication of what the business plan will look like,"
he
>added.
>*****************
>
>United Airlines faces crucial month
>
>Industry's shape is at stake as labor negotiations loom
>
>CHICAGO (CBS.MW) -- The future of United Airlines and perhaps the entire
>airline industry will be charted in the coming weeks in courtrooms and
labor
>negotiations.
>
>Lenders to bankrupt United have imposed "very tough terms and conditions
>that call for immediate and significant reduction of our costs," said
UAL
>Corp. CEO and Chairman Glenn Tilton in a recorded message to employees
this
>week.
>
>Those lenders have a monthly measure for United's financial health, and
>failure to meet the banks' criteria could cut off the money that's
keeping
>the airline aloft. In a Friday filing, United asked a bankruptcy judge
to
>consider breaking its union contracts so that it can lower labor costs
by
>mid-February, a step it says is necessary to meet the banks'
requirements.
>
>"Such a violation would vest the DIP [debtor in possession] lenders with
an
>option to foreclose on their collateral. If exercised, this option would
>spell the end for United," according to the filing. See the filing.
>
>That means layoffs and lower pay as soon as next month. Under agreements
>approved by union officials but not yet voted on by workers, pilots
would
>see pay cut by 29 percent. Attendants would lose 9 percent, while flight
>controllers and ground workers would lose 13 percent of their pay.
>
>The company also wants members of the machinists union, which represents
>37,000 mechanics, ramp workers and customer-service workers, to give up
13
>percent of their wages. Their leaders have not yet endorsed the
proposal.
>The bankruptcy judge said he will rule next week on whether to break the
>contracts and force the union workers to accept the company's plan. The
>company has more than 80,000 workers.
>
>Implementation of that wage-cutting plan, either with union acceptance
or
>under a judge's ruling, buys the airline at least another 10 weeks of
>bankruptcy financing.
>
>A recorded message to employees on Monday made clear that significant
>layoffs are all but assured as United attempts a corporate turnaround
during
>a historic slowdown in air travel.
>
>The message, United said, was issued to comply with federal and state
>regulations requiring advance notice of layoffs. Who loses jobs hasn't
yet
>been determined, the company said in the message, adding that
>"determinations on any necessary layoffs will be made in the next few
>weeks."
>
>Industry looks for direction
>
>The labor negotiations will be closely watched elsewhere in the airline
>industry. United's goals are ambitious: $2.4 billion in labor costs must
be
>cut between 2003 and 2008. It also must get rid of aircraft it doesn't
need
>and negotiate more favorable financial lease terms for the rest of its
>fleet.
>
>Reduced labor costs and eased work rules at United could lead to similar
>changes throughout the industry, bringing expenses at the largest
carriers
>more in line with those of the profitable, low-fare airlines.
>
>United said earlier in the month it would lose up to $22 million a day
in
>December, and perhaps $17 million a day in January. See full story.
>
>UAL Corp. CFO Jake Brace, who's leading the restructuring, reportedly
said
>in court on Monday that the airline will post net operating losses in
2002
>of $3.2 billion - a figure used for tax reporting purposes, according to
>spokesman Rich Nelson. The company has not said how much it expects to
lose
>in 2002 on a reported basis for shareholders but it will be wider than
the
>$2.1 billion last year.
>
>With all of the other problems, a looming war with Iraq doesn't help.
>
>"United is not expected to undertake drastic changes in operations while
in
>bankruptcy, unless the revenue environment worsens significantly (for
>example, during a U.S. war with Iraq), but will likely have to further
>reduce its size and secure greater labor costs and debt reductions than
>previously proposed," wrote Phil Baggaley, Standard & Poor's aerospace
>credit analyst, in a December report.
>
>For shareholders, including the employees who own more than 50 percent
of
>the airline, things couldn't get much worse. At $1.30 a share, the
parent of
>United Airlines is holding above the minimal price listing for the New
York
>Stock Exchange. But shareholders have watched the stock of UAL Corp.
(UAL:
>news, chart) fall from about $14 in the beginning of 2002 to less than a
>ride on Chicago's elevated trains. Further stock sales by the employee
plan
>have been temporarily halted by the bankruptcy judge.
>*****************
>
>2 injured in chopper crash in Nagano Pref.
>
>NAGANO, Jan. 1 (Kyodo) - A helicopter crashed on a mountain in Nagano
>Prefecture Wednesday afternoon, leaving two people injured, local police
>said.
>
>The crash occurred at around 12:30 p.m. at 2,207-meter Mt. Neko near the
>town of Sanada, they said, adding that the two injured crew members were
>flown by another helicopter to a local hospital for treatment, they
said.
>
>One of them was seriously injured with his leg broken, while the other
>sustained light injuries, the police said.
>
>The helicopter, apparently owned by a firm in Maebashi, Gunma
Prefecture,
>crashed soon after it took off from near the top of the mountain, where
it
>had dropped off some skiers moments earlier, they added.
>
>The cause of the accident is under investigation, they said.
>*****************
>
>Aeroflot to lease eight Airbuses for $313.60 mln
>
>MOSCOW, Dec 31 (Reuters) - Shareholders in Russia's state carrier,
Aeroflot,
>have voted to allow the company to lease eight Airbus planes in a
$313.60
>million dollar deal, Aeroflot said in an official announcement on
Tuesday.
>
>The planes, six A-319s and two A-320s, will be delivered between
September
>2003 and December 2004, according to the notice in the official
government
>newspaper, Rossiiskaya Gazeta.
>
>European planemaker Airbus is 80 percent owned by EADS.
>
>Aeroflot already has a contract for 10 more Airbuses and three Boeings
with
>U.S. leasing company GECAS.
>
>It will return 11 Airbuses and 10 Boeings in 2003-2004 under other
>agreements.
>
>Aeroflot has said it expects its 2002 net profit, by international
>accounting standards, to rise 400 percent to $80 million. It plans to
have
>restructured its fleet of foreign aircraft by the end of 2004.
>*****************
>
>Israel's Arkia in leaseback deal with Delta Airlines
>
>TEL AVIV, Dec 31 (Reuters) - Israel's Knafaim-Arkia Holdings said on
Tuesday
>its Arkia Israel Airlines subsidiary had completed a sale and leaseback
deal
>for three aircraft with Delta Airlines.
>
>Arkia will buy three Boeing 757-200 jets from U.S.-based Delta for 230
>million shekels ($49 million) and will lease them back over 9-11 years
for
>400 million shekels, the company said in a statement.
>
>Arkia said 90 percent of the cost of the deal will be financed through
>dollar-linked variable rate loans from Bank Hapoalim with the remainder
>coming from Arkia's own funds.
>
>Following the deal and a similar one signed last month with American
>Airlines, a subsidiary of AMR Corp, the Arkia group's annual income from
>leasing fees will grow by 95 million shekels from 2003 onwards.
>
>Knafaim-Arkia's chief executive officer Israel Borovitch said the deal
was
>part of the company's policy of widening its international activities
and
>reducing its dependence on the domestic market.
>
>"The company's leasing activities with planes that it owns are
characterised
>by a high degree of profitability and long-term stability along with
high
>cashflow that contribute to the group's strength, particularly at a time
of
>crisis in incoming tourism," the compamy said.
>
>After completion of the deal, Arkia wil have a fleet of 34 aircraft, of
>which 31 are being leased to foreign airlines and the rest used by Arkia
in
>its international flights.
>
>It has an additional eight jets that it uses for its domestic and
>international flights.
>
>Shares in Knafaim-Arkia Holdings were up 5.8 percent at 27.8 shekels in
>mid-day trade compared with a 0.7 percent rise on the broader Tel Aviv
>market.
>
>($1 = 4.74 shekels)
>*****************
>
>Australian plane checks cyclone-hit Pacific islands
>
>HONIARA, Jan 1 (Reuters) - An Australian air force plane set off on
>Wednesday to check on some 2,000 Solomon Islanders whose homes were hit
by a
>cyclone three days ago but a witness has already reported scenes of
total
>devastation in the area.
>
>Much-needed emergency supplies, meanwhile, had yet to reach the isolated
>islands of Tikopia, Fataka and Anutade on Wednesday as the crew of a
state
>patrol boat argued over owed wages.
>
>Cyclone Zoe, a maximum-category tropical storm, packing winds of more
than
>300 km an hour (186 mph) cut off all radio contact to the islands. The
eye
>of the cyclone passed over Tikopia.
>
>Emergency authorities have yet to make their way to the isolated islands
>after the cyclone battered them on Sunday.
>
>Martin Karani, from the National Disaster Management Office, said the
>Australian Hercules plane would take aerial photos of the islands before
>going on to land later on Wednesday in Honiara, capital of the Solomons,
>about 1,000 km (600 miles) to the northwest.
>
>He said the plane, which flew at the request of the Solomons government,
was
>not taking supplies because the tiny islands had no airstrips.
>
>Freelance photographer and film-maker Geoff Mackley, who specialises in
>natural disasters, said he had flown over Tikopia early on Wednesday,
after
>a four-hour flight from Vanuatu. He reported a scene of total
devastation.
>
>"Every tree in the island has been blown over or shredded, the island is
>completely denuded of vegetation, almost every building has been
damaged,"
>Mackley wrote on his website (www.geoffmackley.com).
>
>"The sea has come through some villages, burying them...I will not
speculate
>on the likely casualties or fatalities (but) if it is not large it will
be a
>miracle."
>
>Mackley said in his website report that he had only seen about 20 people
on
>Tikopia, and they had rushed down to the beach to wave as the plane flew
>over.
>
>CYCLONE SHELTERS
>
>The National Disaster Management Office has increased its estimate of
the
>number of people on the two worst hit islands -- Tikopia and Anuta -- to
>about 2,000 from around 1,000, a number taken from a census several
years
>ago.
>
>Solomons radio said that although some fatalities and injuries were
>expected, high casualties were unlikely as the islanders would have used
>traditional cyclone shelters.
>
>The Solomons government is bankrupt and the national economy relies on
>foreign aid after years of ethnic militia fighting.
>
>The National Disaster Management Office may have to charter a civilian
>passenger boat to carry supplies to the islands following the delayed
>departure of the patrol boat which was to have carried shelter, food,
and
>medicines from the capital Honiara.
>
>Tikopia, Anuta and Fataka are volcanic islands in the Santa Cruz group
of
>the sprawling Solomons archipelago. Oval-shaped Tikopia, the biggest of
the
>three, measures just five km (three miles) at its longest point.
>
>Cyclone Zoe has weakened since it hit the islands last weekend and was
not
>expected to cause any further damage as it headed east.
>****************
>
>Great Lakes Aviation, Ltd. Announces Completion of Financial
Restructuring
>and Promotion of Chuck Howell to Chief Executive Officer
>
>CHEYENNE, Wyo., Dec. 31 /PRNewswire-FirstCall/ -- Great Lakes Aviation,
Ltd.
>(OTC Bulletin Board: GLUX - News) announced today that it has
successfully
>completed the restructuring of the aircraft financing provided by
Raytheon
>Aircraft Credit Corporation ("RACC") to Great Lakes with respect to its
>fleet of Beech 1900D and 1900C Aircraft. This restructuring, which Great
>Lakes and RACC began discussing earlier this year, results in
significant
>improvements to Great Lakes' cost structure and balance sheet, as well
as a
>36% equity holding by RACC. It also returns Great Lakes to a current
status
>with regard to all of its RACC debt and lease obligations.
>
>Effective with the completion of the financial restructuring, Great
Lakes
>has appointed Charles R. Howell IV as its Chief Executive Officer.
Douglas
>G. Voss, Great Lakes' former Chief Executive Officer, will continue to
serve
>in his capacity as Chairman of Great Lakes' Board of Directors.
>
>Mr. Howell was brought to the company in August of this year as Chief
>Operating Officer in order to strengthen the management team. Prior to
>joining Great Lakes he served most recently as President and CEO of
>Corporate Airlines, a Nashville based regional airline that he
co-founded in
>1996.
>
>Mr. Howell, the company's new CEO, stated, "This restructuring is a
>tremendous boost for Great Lakes and its long partnership with Raytheon.
We
>look forward to being better able to serve our customers and to build a
>stronger company for our existing and new shareholders. Our employees,
our
>code-share partners, and our other stakeholders will also benefit from
this
>accomplishment."
>
>Great Lakes' Chairman of the Board Douglas G. Voss said, "I am pleased
with
>the results that Chuck's capable and experienced airline management
skills
>have had on our operation since joining Great Lakes. The new ideas and
>skills Chuck brings, combined with the company's improved financial
>position, will greatly enhance Great Lakes' future performance."
>
>As of November 1, 2002, scheduled passenger service was being provided
at 47
>airports in fifteen states with a fleet of Embraer EMB-120 Brasilias and
>Raytheon/Beech 1900D regional airliners. A total of 212 weekday flights
are
>scheduled at four hubs, with 172 flights at Denver, 20 flights at
Chicago --
>O'Hare International Airport, 14 flights at Minneapolis/St. Paul, and 6
>flights at Phoenix. All scheduled flights are operated under the Great
Lakes
>Airlines marketing identity in conjunction with code-share agreements
with
>United Airlines and Frontier Airlines.
>
>The foregoing release contains forward-looking terminology, which is
made
>pursuant to the safe harbor provisions of the Private Securities
Litigation
>Reform Act of 1995. Such statements are subject to certain risk and
>uncertainties that could cause actual results to differ materially from
>those projected. Potential purchaser's of the company's securities are
>cautioned not to place undue reliance on such forward-looking statements
>which are qualified in their entirety by the cautions and risks filed by
the
>company with the Securities and Exchange Commission.
>
>Additional information is available on the company web site that may be
>accessed at www.greatlakesav.com .
>***********
>
>Airbus outshines rival in tough year for aero industry
>
>PARIS, Dec 31 (Reuters) - In a year of severe turbulence for the civil
>aerospace industry, European planemaker Airbus snared market share from
>Boeing, positioning itself to sell more planes than its U.S. arch-rival
next
>year for the first time ever.
>
>Although recent data show Boeing outdistanced its Toulouse-based
competitor
>in gross jet orders for 2002 by a 231 to 189 margin, Airbus suffered far
>fewer cancellations during the year and is likely to have won the net
orders
>battle.
>
>More importantly, Airbus significantly narrowed the gap this year in jet
>deliveries, or outright sales, with Boeing set to deliver roughly 80
more
>planes than Airbus this year, down from a nearly 200 jet gap between the
two
>in 2001.
>
>Next year, for the first time ever, Airbus could deliver more planes
than
>its venerable rival, with the companies themselves calling for 300
Airbus
>jets and between 275-285 Boeing planes to roll off production lines.
>
>"Airbus is clearly weathering the downturn better," said Charles
Armitage of
>Merrill Lynch.
>
>The evidence that Airbus is putting its rival under pressure goes beyond
the
>delivery and order numbers.
>
>In 2002, the European manufacturer snared a crucial order from British
>no-frills airline EasyJet Plc, loosening Boeing's stranglehold on the
>booming European low-cost market.
>
>And earlier this month Airbus won a moral victory when Boeing decided to
>scrap plans to build its high-speed Sonic Cruiser, the futuristic plane
it
>touted for more than a year as its answer to the Airbus A380 superjumbo.
>
>The troubles in the U.S. airline market, where UAL Corp's United
Airlines
>and US Airways Group have filed for bankruptcy, could also hit Boeing
>harder than Airbus if other carriers begin cancelling orders.
>
>CLOUDY OUTLOOK
>
>Still, analysts say the longer-term outlook for the two manufacturers,
as
>they navigate through the worst market conditions in history, is less
>clear-cut.
>
>Some worry that the gains made by Airbus in 2002 may have come at a
price.
>
>The EasyJet order was reportedly won with discounts of 40 percent or
more
>and concerns have arisen that Airbus could be propping up order and
delivery
>levels artificially at the expense of profit margins.
>
>Boeing may also be better positioned to weather a continued
deterioration in
>the market and a war in Iraq than Airbus and its listed parent company
>European Aeronautic Defence and Space Co.
>
>The last Gulf War hit European passenger traffic far harder than it did
U.S.
>domestic traffic and analysts say European carriers risk running into
the
>same problems as their struggling U.S. competitors should a new conflict
>erupt.
>
>"A war would be likely to drag down the thus far better performing
European
>and Asian airlines to the U.S. level," said Nick Cunningham, analyst at
>Schroder Salomon Smith Barney, in a recent research note.
>
>That could come back to haunt Airbus, which is scheduled to deliver
roughly
>twice as many planes to European carriers as Boeing over the next three
>years.
>
>BOEING SHIFTS CAPITAL TO DEFENCE
>
>Because of the weight of its military business, Boeing can also expect
to
>profit from recent increases in the U.S. defence budget, which is slated
to
>increase by about $14 billion to $378 billion in 2004.
>
>EADS, by contrast, garners virtually all of its profits and roughly 70
>percent of its revenues from Airbus.
>
>Although the ramp-up of programmes like the Eurofighter combat jet
should
>help reduce its dependence on the civil market in the years ahead, weak
>European defence budgets and a paltry exposure to the lucrative U.S.
market
>have complicated efforts by EADS to achieve a military-civil balance in
its
>portfolio.
>
>That is one reason why Boeing shares have fallen 16 percent this year
while
>EADS stock is down 25 percent and hovering close to record lows. "Boeing
has
>been reinvesting its capital in defence and will be a very different
>business coming out of the civil downturn," said Ben Bristol, analyst at
>Commerzbank.
>
>That capital shift will pay handsome dividends if, as some industry
>executives expect, the civil downturn extends into 2005 or 2006.
>******************
>
>Today in History:
>
>Date of Accident: 01 January 1985
>Airline: Eastern Air Lines
>Aircraft: Boeing 727-225
>Location: La Paz, Bolivia
>Registration: N819EA
>Fatalities: 29:29
>MSN: 22556
>Line Number: 1793
>Engine Manufacturer: Pratt & Whitney
>Engine Model: JT8D-17AR
>Year of Delivery: 1982
>Accident Description: The aircraft crashed into terrain at FL200. Crew
error
>in not adhering to prescribed flight track. CFIT.
>
>*******************