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UPDATE
Week ending December 15, 1996
+++ Boeing and McDonnell Douglas to merge +++ Mixed news from French-German summit +++ Boeing rolls out new-generation 737 +++ Airbus flies A321-200 +++ MTU and Volvo sign co-operation MoU +++ euroMeads company established at Unterschleißheim +++ Delta Air Lines to acquire Continental Airlines ? +++ Hughes wins AIM-9X competition with Evolved Sidewinder +++ McDonnell Douglas offers F-18 assembly in Poland +++ News in brief +++

Boeing and McDonnell Douglas to merge
Fusion von Boeing und McDonnell Douglas angekündigt

At noon on Sunday, December 15, at the National Press Club in Washingto D.C., the top management of Boeing and McDonnell Douglas officially announced their intention to merge the two companies. This "historic" move, when completed in around six months time, will create the largest aerospace company in the world, with a predicted turnover of 48 billion US-Dollars in 1997 and a backlog of around 100 billion Dollars.
The deal, which was first contemplated around a year ago but shelved then, was apparently sealed after quick new negotiations last week. Even before the full merger, Boeing had agreed to use McDD engineers and facilities to cope with a large production and development workload. Details of that agreement should have been announced in January, so the timing of the new announcement was a bit of a surprise.
At the Washington press conference, Boeing president Phil Condit explained that he saw great opportunities for the combined company, which will retain the Boeing name only. He emphasised three points:
  • Firm foundation, with almost 300 years corporate experience in the aerospace field.
  • Formation of a "balanced" company, with a balance of solid production programmes and exciting new future projects, a balance between civil, space and military activities.
  • Opportunity to form a really integrated company, with its people as its greatest strength.
Concerning the top managment, Phil Condit will serve as Chairman and CEO, while current McDD boss Harry Stonecipher will take over as President and Chief Operating Officer.
Stonecipher especially remarked that for him the "timing" of the merger is excellent, with the airliner market booming. This will keep redundancies to a minimum, he said. "We have a business that is growing". Boeing will be the largest US exporter.
In a first response to the news, Dasa chief executive Manfred Bischoff saw it as a vindication of Europes aim to form a strong Airbus to compete with the US giant. He said that it is urgent to match Boeing products across the board, especially to challenge the 747 family. Also, European aerospace companies would need strong support with resarch and development financing from their Governments.

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Mixed news from French-German summit
Deutsch-französischer Gipfel bestätigt Hubschrauberprogramme

The latest French-German summit in Nuremberg seems to have been a mixed blessing for the aerospace industrie of the two countries. Although the communique and remarks at the concluding press conference were extremely short of details, the following facts concerning major aerospace programmes have emerged:
  • Concerning the reconnaissance satellites Helios II and Horus, President Chirac and Chancellor Kohl once again reinfored the importance of these programmes. Germany will, however, delay its entry into the projects for probably another year. To maintain timetables, France will go ahead with Helios II now, which will require adaptations of the arrangements for industrial participation by German companies. Helios II launch is scheduled for 2002. Kohl explicitly thanked Chirac for "understanding" the critical budget situation precluding an earlier contribution.
  • Contracts for the Eurocopter Tiger attack helicopter should be signed "as soon as possible". After series preparation, it is envisaged to order 80 UHU-varants for the German army, 70 escort and 10 anti-tank machines for France as a "first tranche", with service entry in Germany targeted for 2001. Although Eurocopter hopes for a contract signature in the next three months, some questions remain unresolved. First, there seem to be French demands on a ten per cent price cut, and then the location of the single final assembly line needs to be decided. Jean-Yves Helmer, director of the French procurement agency DGA, has indicated that this could be Donawörth.
  • For the NH90 transport helicopter, a need of 243 machines for Germany and 160 for France were confirmed in principle.
  • The need for a new transport aircraft was confirmed, but so was the fact that there is no money to fund development. The German defence ministry is still studying whether the "commercial approach" pushed by industry is compatible with budget laws. If so, financing could be arranged through loans, after the Governments have guaranteed purchase of the resulting aircraft.
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Boeing rolls out new-generation 737
Erste Boeing 737-700 vorgestellt

On December 8, Boeing unveiled the first of three new Boeing 737 derivative airplanes during a company-wide celebration at its Renton (Washington) facility. The latest versions of the best-selling jet airliner ever were designed to counter the challenge by Europes successful high-technology A320-family.
"When deliveries of the Next-Generation 737s begin next year, they will set a new standard for commonality, simplicity, reliability and maintainability," claimed Ron Woodard, Boeing Commercial Airplane Group president. He emphasized that the newest 737 family members are an important addition to the Boeing product line. Since the Next-Generation 737 product line was launched in 1993, 21 airlines worldwide have ordered a total of 501 new 737-600/-700/-800 jetliners, setting a new aviation industry sales record before rollout of the first airplane.
Nearly 50,000 guests, including employees, retirees, customers, suppliers and community leaders, attended a series of ceremonial rollout "shows" during the day-long celebration. The the first 737-700 shown is the 2,843rd 737 airplane to roll off the production line.
After the celebration, the aircraft is being prepared for its first flight in February. The Next-Generation flight-test program - beginning in February and concluding in 1998 consists of 10 airplanes, including four 737-700s, three 737-800s and three 737-600s. The -700 offers 128 to 149 seats and is equivalent in size to the current 737-300, but with greater range. The 737-800 is the second member of the Next-Generation 737 family and will roll out in June 1997 followed by first flight in July and certification in early 1998. The -800 is a stretched version of the current 737-400 and is capable of carrying 160 to 189 passengers. The 737-600, equivalent in size to the current 737-500, provides seating for 108 to 132 passengers. Currently, more than 30 percent of this model's "product definition" is released, with rollout planned for December 1997, first flight in January 1998 and certification in July 1998.
Southwest Airlines launched the 737-700 in November 1993 with an order for 63 airplanes and will take first delivery in October 1997. The 737-800 was launched in September 1994 with an order for 16 airplanes from Hapag-Lloyd of Germany. Hapag-Lloyd will take delivery of the first 737-800 in early 1998. SAS, or Scandinavian Airlines System, launched the 737-600 in March 1995 with an order for 35 airplanes and added six more in October of that year. Deliveries to SAS will begin in mid-1998.

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Airbus flies A321-200
Neue A321-Version mit größerer Reichweite fliegt

On December 12, the new Airbus A321-200 completed its 4.5 hour maiden flight from the Dasa airfield at Hamburg-Finkenwerder. The aircraft was powered by IAE V2533-A5. Main feature of the new Airbus narrowbody variant is additional tankage and structural reinforcemnts to allow a take-off weight of 89 tons. This translates into a range increase of 650 km to 5000 km.
First customer for the A321-200 is the US leasing company ILFC. Certification will be achieved in February 1997, Airbus has said. Today, 196 A321 have been sold, as well as 792 A320s and 120 A319s.

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MTU and Volvo sign cooperation MoU
Volvo und MTU vereinbaren engere Kooperation

On December 11, MTU and Volvo signed a Memorandum of Understanding covering a more extensive cooperation. The two engine manufacturers want to "optimise the current capabilities in design, development and production. Volvo will concentrate on engine cases and MTU on blades, disks and rings", it was said in a statement.
First step in the new cooperation is the inclusion of Volvo on the PW4084/90/98 series of engines. Also, technology efforts will be pooled without looseing core competencies at both partners. Long-term, Volvo and MTU hope for substantial cost cuts due to the cooperation, wich is hailed as a good signal for Europe-wide rationalisation in this highly competitive market.

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euroMEADS company established at Unterschleißheim
Neue Gemeinschaftsfirma für MEADS gegründet

To coordinate the European participation in the MEADS air-defende missile programme, Alenia, LFK and Siemens have established the euroMEADS Air Defence Systems Beteiligungsgesellschaft GmbH at Unterschleißheim near Munich. Dr. Diethard Pfab has been appointed general manager.
Currently, MEADS is in the 225 million US-Dollar project definition and validation phase, which will be completed by the end of 1998. Under the direction of the NATO MEADS Managemnt agency in Huntsville (Alabama), two transatlantic joint venture companies - MEADS Inc. and MEADS International - compete for the development contract. In both companies, euroMEADS is the European 50 per cent shareholder. The other 50 per cent are being held by Hughes/Raytheon and Lockheed Martin respectively.

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Delta Air Lines to acquire Continental Airlines ?
Schluckt Delta Continental Airlines ?

According to airline sources, Delta Air Lines of the US, the third largest airline in the world, plans to aquire Continental Airlines, the number five US carrier. A merger would create the largest carrier worldwide. US media reports say, the two had been in talks for months. Neither company would confirm or deny the speculation. Analysts think a possible takeover of Continental, which had been brought back into black figures recently, would cost Delta at least 2 billion US-dollars. Together, the carrier would control 25 percent of the US market. United Airlines is supposed to have a 21 percent market share at the moment.

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Hughes wins AIM-9X competition with Evolved Sidewinder
Sidewinder-Nachfolger: Auftrag geht an Hughes

On Friday, December 13, the Naval Air Systems Command awarded Hughes Missile Systems Co. a $169 million winner-take-all contract for engineering and manufacturing development of the AIM-9X, the next-generation replacement for the existing AIM-9M Sidewinder short-range air-to-air missile for the US forces.
The program is worth an estimated $5 billion in potential sales over the next 20 years. U.S. production would include up to 10,000 missiles, and a significant potential exists for international sales to allied nations. "This win is significant for HMSC as it establishes us as the market leader of air-to-air missiles for the next two decades," said HMSC President Louise Francesconi after beating off competition from Raytheon.
Evolved Sidewinder is an improved version of the Sidewinder that incorporates thrust vector control. It is configured with Hughes' mature, high-performance production focal plane array sensor, a Texas Instruments advanced tracker and the existing AIM-9M rocket motor, warhead and fuze. The sensor was originally developed for the U.K. ASRAAM. Texas Instruments, Matra BAe Dynamics (UK), HR Textron and Alliant Techsystems are key teammates in the Hughes AIM-9X Evolved Sidewinder program.

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McDonnell Douglas offers F-18 assembly in Poland
F-18 Endmontage in Polen angeboten

During a ceremony on December 10 to open a new office in Warsaw, company officials announced that McDonnell Douglas will place final assembly of the F/A-18 Hornet in Poland, should the country decide to procure the strike fighter for its air force. This offer is the latest move in the battle to sell western combat aircraft to countries like Poland, Hungary and the Czech Republic.
In addition to committing to place final assembly in Poland, McDonnell Douglas has completed its survey of Polish industry as part of its efforts to develop an industrial participation program with the country. The survey included companies from the agricultural, aerospace, defense, energy and environmental industries.
"The work we intend to place in Poland will help launch the Polish aerospace industry into the same category as the Finnish and Swiss aerospace industries," said Bud Mitchell, vice president for F/A-18 international market development. "Polish industry has a long and proud aerospace heritage and a substantial technology base," Mitchell said. "We are honored to have an opportunity to work in alliance with Poland to further expand its industrial capabilities and to enhance the nation's global competitiveness."
Meanwhile, Air Force representatives from the Czech Republic have concluded a 12-day, eight-flight evaluation of the F/A-18 Hornet at McDonnell Douglas in St. Louis and at industry and U.S. Marine Corps sites in California. Two Czech air force pilots (Lt. Col. Ficenec and Lt. Col. Bittner) flew the F/A-18 simulator, toured the F/A-18 production line and attended F/A-18 program briefings Nov. 14-20 at McDonnell Douglas. After that, they flew a two-seat U.S. Marine Corps F/A-18D aircraft from Hornet squadron VMFA-242 Nov. 21-25 at the Naval Air Warfare Center-China Lake, Calif.

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NEWS IN BRIEF - KURZMELDUNGEN

Aerospace orders, sales, exports, net profit and employment all increased in fiscal year 1996, Don Fuqua, president of the US Aerospace Industry Association, told a year-end conference in Washington. His group estimates jetliner sales will reach $29 billion in 1997, a record 54 percent increase. He also predicted industry employment will grow by 39,000 by the end of 1997. Sales to the Defense Department are less than half what they were in the industry's peak year, 1987, and Fuqua estimated they will drop another 6 percent in 1997.
+++
Eurocopter employees at Ottobrunn are concerned that ECD offices and facilities will be concentrated at the Donauwörth production plant some 100 km away. They especially want development work and test equipment like a rotor test stand to be maintained. Movement will not result in significant savings, they contend.
+++
City Bird, an airline subsidiary of City Hotels in Brussels, Belgium, took delivery of a new McDonnell Douglas MD-11 jetliner on December 13. City Bird will begin a new long distance scheduled and charter air service based in Brussels. The company will operate a leased MD-11. City Hotels previously owned EuroBelgian Airlines, now flying short- and medium-range charter services in Europe as Virgin Express Airlines.
+++
Airbus Industrie has sold two of its A300-600ST Beluga special freighters to the BBV Leasing Fond in a transaction worth around 580 million DM. Westdeutsche Landesbank is now seeking investors for the fond, mainly offering attractive tax benefits. The deal allows Airbus full access to the Belugas, which will be leased to Beluga Ltd. in Dublin, owned 100 per cent by Airbus. The complex arrangements will free working capital for Airbus.
+++
In January, prototype number four of the Tiger attack helicopter will be flown to Kiruna in northern Sweden for cold-weather trials. Also, Eurocopter will take the chance to demonstrate the Tiger to the Swedish army. Major Persson and Captain Rastedt already prepared for this evaluation with some simulator sessions at Ottobrunn. HIghlight of the trip to Sweden will be participation in the "Polar Star" exercise.
+++
As the first North American customer, Air Canada has taken delivery of its first Airbus A319. The ceremony on December 12 in Toulouse was attended by Airbus president Jean Pierson and Lamar Durrett, chairman and chief-executive of Air Canada. Airbus is now able to assemble an A320-series aircraft in nine months, giving customers more flexibility, Pierson said. Air Canada has orders for 35 A319s.
+++
Next March, the "1. International Symposium on Space Tourism" will be held in Bremen. More details can be obtained from IP Space Tours GmbH, Hartmut Müller, phone Germany-421-539-5692.
+++
Bombardier Aerospace has sold a Canadair CL-415 amphibium aircraft to the Republic of Croatia. The value of the contract is approximately 22 million US-Dollars, including training and support. Delivery date is set for January 1997.
+++
Fokker Aviation (a Stork subsidiary) has signed a five-year contract with American Airlines for a complete package of technical and logistical support services for the airlines fleet of 75 Fokker 100.
+++
For the first time ever, the Cologne/Bonn airport has welcomed its 5 millionth passenger in a single year. The milestone was achieved on December 9. This event underlines the healthy growth this year, with nearly ten per cent more passengers expected.
+++
The delivery of the first batch of 30 Saab JAS 39 Gripen to be used by the Swedish Air Force was completed on December 13. After a brief ceremony at Linköping, the aircraft was handed over to the Swedish Defence Materiel Administration (FMV). The first combat-ready Gripen squadron will be in operation in the autumn of 1997.
+++
BBA Group, the UK engineering company, plans to establish its first European fixed base operation at Zurich airport. This will be a joint-venture with Zimex, it was announced on December 9.
+++

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Previous updates are still available:

LRI Fakten - News from the BDLI

The German Aerospace Industries Association (BDLI, Bundesverband der Deutschen Luft- und Raumfahrtindustrie e.V.) is publishing a monthly newsletter, which we are pleased to offer to our international readership online. Just klick here for the November/December issue of LRI Fakten.

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Copyright 1996 by Motor-Presse Stuttgart. All rights reserved.
Last updated December 14, 1996