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UPDATE

Week ending October 13, 1996

Eurofighter future still in the balance +++ Potentials in Space: Some comparative figures +++ Turbomeca is looking for a new German partner +++ Lammert: Industry needs strategic thinking +++ Fairchild Dornier: 50-seater Dornier 328 to become a jet? +++ Deutsche BA sells turboprop fleet to French Regional Airlines +++ Rühe: procurement cuts outlined +++ DFS to reduce number of ATC centres +++ Boeing announces deliveries and production rate changes +++ News in brief

Eurofighter future still in the balance
Eurofighter-Produktion bleibt ungeklärt

The future of the Eurofighter programme remains in the balance as German politicians and industry continue discussions on how to secure enough money for production preparations to begin in 1997. The same day as Dasa and supplier company representatives lobbied hard for a quick decision on production investment, defence minister Volker Rühe told members of the Bundestag-Verteidigungsausschuß (defence committee of German parliament) that recent budget cuts have left much less money than necessary even for high-priority programmes.
"The defence ministry wants the aircraft (EF2000) as it is now, at an acceptable price", declared an official at a technology forum in Bonn on Wednesday. "We are determined to resolve the financial difficulties, but maybe we need the help of industry here", he declared: "Discussions continue, and not all cards are on the table yet!" This alludes to possible bridge financing to be arranged by the manufacturers, because for now it seems that the defence ministry will have just 100 million DM available next year. According to industry, thats just one third of what is needed to make any sense of moving the programme to the next stage.
Like her collegues before, Christa Müller, managing director of AOA Gauting, reminded the Government that a decision is needed now. "We are serving the State that has a declared need for the Eurofighter. We have invested a lot of resources in the programme which could well be applied in more promising ventures".
Meanwhile, the UK has increased pressure on Germany to go ahead soon. "I have made it clear that the British government is ready to proceed", said defence secretary Michael Portillo. "If we are to have good export prospects for the aircraft, it needs to be produced without further delay".

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Potentials in Space: Some comparative figures
Vergleichszahlen zum Raumfahrtgeschäft vorgestellt

A German government official gave recent statistics at the Dasa aerospace symposium at Bonn's Godesburg early October. Mr. Urban, heading the working group of the German government's coordinator for aerospace affairs, Dr. Lammert, estimated the market potential for space related products and services at 300 billion US-Dollars until 2016. For space hardware only his group expects orders valued at 45 billion US-Dollars.
In the space satellite business, US companies rank places one to six with Dasa, the biggest German aerospace company on rank 10. US companies earn 84 per cent of all space related industry turnover. Europe takes 11, Japan 5 per cent. Summing up the national GDPs of the three regions the US holds only 36 per cent, Japan 20 to 22 per cent and Europe 40 plus per cent.
For Germany the figures are 2 to 3 per cent of the international space business, but 10 per cent of the GDP. In Germany the space related industrial turnover sums up to 2 billion DM (1.33 billion US-Dollars), about 10 per cent of the total aerospace turnover. 5000 people are employed in space oriented companies.
Government orders make up 1.6 billion Marks per annum. Looking at the international order book, US companies get 84 per cent, Japanes companies 6 per cent of possible business. Europe covers around 10 per cent, with roughly a third of that flowing into German companies.
Urban emphasized however that with a German share in development cost of the Ariane 5 of 700 million Marks a turnover of 4 billion Marks could be generated for German companies.

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Turbomeca is looking for a new German partner
Turbomeca auf der Suche nach einem deutschen Partner

With a market potential of 1000 helicopter engines for the next 10 years, Germany is a very promising market for engine manufacturers. Turbomeca of France is therefore actively looking for a permanent German partner.
While MTU is cooperating with Rolls-Royce and Turbomeca in the MTR390 for the Tiger combat helicopter, the German engine company withdrew from the RTM322, with M now standing for Turbomeca. The French company obviously sees problems in MTU's strategic transatlantic partnership with Pratt & Whitney. That relation was forced upon MTU by former Daimler Benz chief Edzard Reuter and Dasa-boss Jürgen E. Schrempp very much to the dismay of the MTU managers then.
With the competition for new helicopters for the police forces, the Boarder Police, the German Red Cross and the ADAC concentrating on Eurocopter's EC 135 and McDonnell Douglas Explorer, Turbomeca sees possible problems with MTU as a partner of Pratt and Whitney Canada, the PW206 being the strongest competitor of the Arrius 2B.
Though MTU still is the prefered possible partner for Turbomeca, BMW Rolls-Royce seems to be the only alternative for the French company. The lingering discussion within Daimler-Benz about the company's future structure also contributes to the growing distrust of Turbomeca's management. After talks between Turbomeca and MTU at Farnborough the French company's management is still waiting for answers from Munich.

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Lammert: Industry needs strategic thinking
Koordinator fordert mehr Weitsicht von der Industrie

Norbert Lammert, speaking at the opening of a symposium on aerospace technologies in Bonn, has reassured industry that the German government will continue to support the aerospace industry, which is a strategic asset. The state secretary, responsible for the coordinatiion of aerospace affairs, warned, however, that industry needs to transform itself quickly to confront the global competition of the 21st century. Not only next years profits are important, but a strategic vision, he emphasised. Concerning specific topics, his remarks included:
  • Airbus needs to restructure itself as quickly as possible to have a chance to defend its hard-won market share. This must go hand in hand with new product development.
  • The decision on the launch of the EF2000 series production must be taken now, because times are not going to get better. Because there is not enough money in the 1997 budget, some creative solutions on the financing will have to be found to work around this problem
  • Prospects for German/French armaments programmes are a bit better than in the summer. Especially the Horus reconaissance satellite is of eminent political importance. Failure to find a resolution to the problems at the next summit would have grave political consequences.
  • The resturcturing of Europes aerospace industry must be concluded by 2000 at the latest. This will demand the ceding of national competences and the full cross-border merger of companies. Lammert admitted that practical steps in this direction are extreemly difficult, but without them there is no future.
  • German industry must continue to work hard to achieve cost reductions.

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Fairchild Dornier: 50-seater Dornier 328 to become a jet?
Jet-Version der Dornier 328?

A 50-seat version of the existing Dornier 328 is still under consideration with studies now being conducted on both a turboprop and turbofan version, Fairchild Dornier Chairman and CEO Carl Albert confirmed at the General Assembly of the European Regional Airlines Association (ERA) that took place in Hanover on October 2nd - 4th. Personally, Albert believes the 50-seater should be a jet, acknowledging the growing trend towards jets among US regionals. In related news, the workforce at Dornier Luftfahrt GmbH in Oberpfaffenhofen is in the process of being reduced from 2,000 to 1,500 by year end.

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Deutsche BA sells turboprop fleet to French Regional Airlines
Regional Airlines übernimmt Turboprops von der Deutschen BA

Deutsche BA, a subsidiary of British Airways, is going to sell its turboprop fleet comprising five Saab 2000 aircraft to French carrier Regional Airlines. The surprising deal is scheduled for early 1997. As Deutsche BA said, Regional plans to establish a subsidiary in Germany, taking over the turboprop route network of Deutsche BA. No cuts in workforce are planned so far. Deutsche BA, which is making heavy losses, is in very strong competition with Lufthansa and wants to concentrate on jet aircraft operation, ist core business.
Regional Airlines was founded in 1992 from the merger of Air Vendée and Airlec . It is based at Nantes airport and has a workforce of around 350. The leased fleet comprises some British Aerospace Jetstream Super 31s, eight Saab 340B and four Saab 2000 as well as an ATR42-300. Two jet-powered Embraer EMB-145 are on order. Cities served include Barcelona, Bordeaux, Lyon, Toulouse, Amsterdam, Madrid, Nice, Porto, Manchester, Geneva and Brussels.

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Rühe: procurement cuts outlined
Beschaffungskürzungen für die Bundeswehr

In a statement before the Bundestags-Verteidigungsausschuß (parliamentary defence committee), Defence minister Volker Rühe has outlined how he intends to implement cuts in the 1997 budget. The only way to meet strict targets is to scale back investments, he said. Specific programmes hit will be:
  • no more A310s for the Flugbereitschaft
  • no Super Puma helicopters for the Flugbereitschaft
  • no buy of Apache MAW missiles for Tornado
  • no money for development of FLA, but talks continue how to save this programme
  • no money for the Helios/Horus spy satellites
  • delay of production investment for the Tiger helicopter by one year, but 50 helicopters will be delivered between 2001 and 2006
More encouraging news came for the NH90 transport helicopter, which will be bought from 2003, and for new air-to-air missiles, which are needed in parallel with Eurofighter introduction into squadron service. Final budget decisions are expected in mid-November.

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DFS to reduce number of ATC centres
Zahl der deutschen Kontrollzentren wird reduziert

62 ATC centres in Europe are too many. At the recently held SatNav Symposium in Munich a DFS official (Deutsche Flugsicherung, the German ATC organisation) said the overall political objective has to be a significant reduction. Otherwise air traffic will not be controlled but obstructed.
DFS itself plans to reduces ist number of ATC centres from six to three in the very near future. One each for the north, the center and the south of the country. It is already decided that Langen near Frankfurt/Main will be the centre for the heart of Germany. For the north Bremen or Berlin are possible locations. A definite decision will be made until December this year.
Still pending, and not due for 1997, is the decision where the south centre will be based. This issue is linked to European developments, though Karlsruhe or Munich are possible locations.

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Boeing announces deliveries and production rate changes
Produktionssteigerung bei Boeing angekündigt

Boeing has reported its delivery figures for the third quarter and announced a further acceleration of its 737 production rates next year. The company is also "working with suppliers to ensure that it can respond to an even greater, future demand for the 737. The figures for the various Boeing models are as following
  • Boeing 737 15 delivered in third quarter 1996, 17 per month in 3rd quarter 1997
  • Boeing 747 5 delivered in third quarter 1996, 4 per month in 3rd quarter 1997
  • Boeing 757 15 delivered in third quarter 1996, 4 per month in 3rd quarter 1997
  • Boeing 767 10 delivered in third quarter 1996, 4 per month in 3rd quarter 1997
  • Boeing 777 9 delivered in third quarter 1996, 7 per month in 3rd quarter 1997

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NEWS IN BRIEF - KURZMELDUNGEN

Crossair, the Swiss regional carrier, won the 1996 Airline of the Year award created by ERA (European Regional Airlines Association). A panel of six international travel and aviation writers (including an editor of FLUG REVUE) determined the winning airline, based on growth, operations, finances, marketing, image and quality of service.
+++
According to Jean-Yves Helmer, France's chief of defence procurement, his country and Germany intend to set up their planned joint arms agency on November 12 at a meeting of the defence ministers. Helmer hopes that the agency "can formally become in 1997 an organ of the Western European Union (WEU)", and that the UK and Italy will join soon.
+++
Eurocopter has announced the sale of six EC 135 light twin-engine helicopters to Helicap, based at Paris heliport. They will be delivered between April and November 1997. This will enable Helicap to satisfy the latest European JAR-OPS3 regulations concerning public passenger transport. The EC 135s will be used for air ambulance work, where Helicap uses 13 dedicated AS 350B/BA Ecureuils today. In total, the company has 17 helicopters.
+++
After Germany and Spain, French air force chief General Jean Rannou has signed the European Staff Requirement (ESR) defining the specifications for the proposed FLA (Future Large Aircraft). Before the development of the new transporter can be launched, difficult financial hurdles will have to be overcome. Industry, through Airbus, is working on proposals emphasising private investment in return for a firm commitment by the Governments to buy FLAs from 2004/5.
+++
Eurocopter can expect good business from the recent decision by the UK ministry of defence to award the contract for helicopter flight training of all services to a civil team comprising Bristow Helicopters, FR Aviation and Serco. According to reports, the fleet to train 230 pilots per year will comprise 38 Ecureuil AS 350BAs and nine Bell 412EPs. After delays with the selection of a winner in the competition, timetables will have to be compressed to allow first helicopter deliveries next spring.
+++
On October 2, Germany has officially ended its support of UN operations in Irak (UNSCOM). Last aircraft to return home was a C.160 Transall, which was based at Bahrein. The last helicopters were pulled out a month earlier. Since October 1991, the Transalls and CH-53s had clocked up 8300 flying hours in over 5300 sorties. More than 57000 personnell and 4000 tons of material were moved without accident.
+++
The test flights with a new recce pod for the German Tornados are scheduled to begin soon at Manching. The pod, under development at Dasa, has been delivered from the Augsburg factory on time. It will mainly be used for aerodynamic verification work before sensor tests start next summer.
+++
Since October 1, Daimler-Benz Aerospace Airbus has implemented a new organizational structure to "speed up processes in the company". Since 1992, around 60 per cent of leading manangement fuctions have been eliminated to streamline operations and delegate responsibility to the workforce.
+++
The Manching plant of Daimler-Benz Aerospace has completed depot maintenance of its 100th Panavia Tornado for the Luftwaffe. Around 120 working days are needed for the thorough inspection, which comes after around 2400 flying hours.

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Last updated October 5, 1996