FLUG REVUE update: Week ending December 9, 2001

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UPDATE

Week ending December 9, 2001

+++ Lufthansa to order 15 Airbus A380 +++ Crossair board reshuffle +++ Missile Defence test success +++ Lufthansa avoids layoffs +++ Shuttle in orbit +++ Helios II MoU signed +++ News in brief +++

Lufthansa to order 15 Airbus A380
Neuer Auftrag für Airbus

At its meeting in Frankfurt, the Lufthansa Supervisory Board has approved an Executive Board proposal that orders be placed for fifteen Airbus A 380-800 superjumbos. "With this decision, we are signalling a future-oriented investment, which will help strengthen Lufthansa's position long term in international competition," said Lufthansa Chairman and CEO Jürgen Weber after the Supervisory Board meeting. The anti-cyclical decision amid the present crisis in the air traffic industry constitutes a strategic investment. The first of the super jumbos are scheduled for delivery in the third quarter of 2007. The size of this new aircraft generation will substantially impact profitability in flight operations, said Weber. "The A380 allows per-seat costs to be reduced by between 15 and 20 per cent." Long cooperation between Lufthansa and Airbus Industrie facilitated agreement between the two on contractual details, which made it possible for the airline to make its buy decision now despite the difficult economic situation. A decision on the powerplants for the A380 jets will be taken later.

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Crossair board reshuffle
Suter tritt zurück

Moritz Suter and the entire Crossair Board of Directors resigned in advance of the company's Extraordinary General Meeting of Thursday, December 6. In doing so, the Board paved the way for the Meeting's election of the new Board of Directors nominated by the steering committee formed to help shape the new Swiss airline. The meeting also approved the company's proposed capital increase, which will provide Crossair with an additional CHF 2.7 billion to create and develop a new international airline.
The great showdown was averted in the end: to avoid an unnecessary second Extraordinary General Meeting, and in the interests of the company's future, Moritz Suter stepped down from his post as Chairman of the Board of Crossair with dignity and style. Several leading figures from all over Switzerland, after an initiative of art dealer and museum founder Ernst Beyeler with over 60'000 subscribers, have lobbied for Moritz Suter to remain in office in the run-up to the meeting. In addition to Moritz Suter, current Board members Elisabeth Simonius, Dr. Ralph Lewin, Thierry Lombard and Dr. Alfred Wiederkehr also announced their resignations shortly before the Meeting. Former Board members Dr. Mario Corti and Georges Schorderet had already stepped down earlier in the year.
The Meeting subsequently elected the eleven individuals nominated by the steering committee: Pieter Bouw, Jacques Aigrin, Kevin Benson, Philipp H. Geier, Claudio Generali, Riccardo Gullotti, André Kudelski, Michael Pieper, Urs Rohner, Peter Siegenthaler and Peter Wagner were each elected to the Board for a three-year term of office.
The shareholders attending the Extraordinary General Meeting also approved the proposed capital increase which will provide Crossair with up to CHF 2.74 billion in additional share capital. Under the proposal adopted, current shareholders will have the right to acquire new shares at CHF 280 per share in proportion to their current holdings. Shareholders in the public sector and major private shareholders have already indicated their intention to subscribe to the new share issue at the same price for a total amount of up to CHF 2.74 billion. The major shareholders have also confirmed that they will retain their new shares for at least twelve months.

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Missile Defence test success
Raketenabwehr-Test erfolgreich

The Ground-based Midcourse Defense (GMD) program's Integrated Flight Test was once again a success -resulting in an intercept and complete destruction of the incoming target. The December 4 test, referred to as Integrated Flight Test - 7 (IFT-7), was the third system-level test of the program, incorporating all major elements into the test scenario. Boeing is the prime contractor for the GMD Program (formerly the National Missile Defense Program). The intercept occurred over the Pacific Ocean at approximately 10:30 pm EST. The flight-test sequence began with a target vehicle launch from Vandenberg Air Force Base, Calif. The Defense Support Program satellites detected the target booster, equipped with a mock reentry vehicle and decoy, and the GMD Battle Management, Command, Control and Communications (BMC3) was alerted. BMC3 cued ground-based radars that tracked the target complex and provided more accurate target information to the BMC3. The BMC3 provided a weapon-tasking plan to the interceptor and gave the commands leading to the launch of the interceptor vehicle from the Regan Test Site in the central Pacific Ocean approximately 20 minutes later.

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Lufthansa avoids layoffs
Einigung bei Lufthansa

Lufthansa has reached agreement with the Ver.di public service workers union and the Vereinigung Cockpit pilots union on a comprehensive package of measures aimed at reducing personnel costs for ground staff as well as cabin and cockpit crews. Together with the steps already taken like a recruitment freeze, the using-up of any remaining holiday entitlement and overtime, the reduction in extra flying hours for flight crews, more part-time offers and unpaid special leave, Lufthansa can expect to improve cash flow next year by at least 210 million euros.
The agreement encompasses the following points: Collective pay agreements for ground and cabin staff are to be prolonged by seven months up to the end of October 2002; the increase in basic pay for cockpit crews, agreed on for February 1 2002 at arbitration last June, is also to be deferred by seven months to September 1 2002. The unions and mediator can still reach a decision diverging from this; payment of half the 13th monthly salary for ground and cabin staff in May 2002 is to be suspended. Management and unions are to conduct talks in the first quarter of 2003 on suitably converting that payment into time/value assets. Should the Group return negative results in 2002, those talks will not be held until the first quarter of 2004; the envisaged 2.8 per cent structural improvement in cockpit crew remuneration in May 2002 is to be deferred until October 2002. Management and unions are to hold timely talks on a further deferment up to year-end, depending on the actual situation. In view of the particularly severe impact of the crisis on LSG/Sky Chefs, a working group is to draft additional measures to save costs and safeguard the future of the catering arm by the end of January 2002. Those measures will, above all, include the introduction of flexible working hour models and the employment of a bigger percentage of staff on flexible employment contracts. As already reported, short time is to be introduced for cabin crews from November 1 2001 to the end of April 2002. In view of these agreed measures with the staff, Lufthansa will not resort to any layoffs or dismissal of probationary staff up to year-end 2002. Young pilots completing their training by September 30 2002 are to be taken on the staff.
Costs will further be eased by the expected reduction in the headcount at the Lufthansa Group resulting from fluctuation or natural attrition as well as part-time employment offers and unpaid special leave. The Lufthansa employees in Germany in 2002 will be down on original planning by about 1,700, including about 700 at LSG/Sky Chefs in Germany.

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Shuttle in orbit
Raumfähre im All

Space Shuttle Endeavour lifted off on the afternoon of December 5 on the final space shuttle mission of 2001, and, after a flawless climb to orbit, it was on its way to deliver a fresh crew to the International Space Station and return home a crew that has spent four months in space. The station was about 250 statute miles above the central Indian Ocean as Endeavour rocketed away from Launch Pad 39-B at the Kennedy Space Center, FL, on time at 4:19 p.m. CST. Docking with the ISS was planned for Friday to begin a week-long stay. Endeavour is commanded by Dom Gorie with Mark Kelly serving as pilot. Mission Specialists are Linda Godwin and Dan Tani. Also aboard Endeavour are station Expedition Four crew members Commander Yuri Onufrienko and Flight Engineers Carl Walz and Dan Bursch, who are beginning more than five months in orbit.
Endeavour will bring home the Expedition Three station crew, Commander Frank Culbertson, Pilot Vladimir Dezhurov and Flight Engineer Mikhail Tyurin, who have been aboard the station since mid-August. In addition to the new crew, Endeavour is carrying more than three tons of food, supplies and equipment in the Raffaello logistics module to the orbiting outpost.

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Helios II MoU signed
Vertrag über Aufklärungssatellit unterschrieben

The cooperation arrangement for the Helios II earth observation satellite, between the defense ministries of Belgium, France and Spain went into effect on December 6, 2001, after its signature by the three parties. According to this arrangement, Spain will upgrade its Helios I installations, allowing it to program and receive, confidentially, imagery provided by the Helios I system. The upgraded equipment will be installed at the Torrejon center, near Madrid, before the launch of the Helios IIA satellite, scheduled for the first quarter of 2004. At that time, Spain will benefit from the capability to program missions to meet its specific requirements, proportionally to its 2.5 % participation in the Helios II program. It will also benefit from the joint imagery generated at the request of the program's two other partners. Signature of this arrangement marks an enhanced, long-term cooperation between France, Belgium and Spain in the field of intelligence, building on the three countries' routine cooperation on the Helios I program since 1995. Germany, which is preparing the development of the future SAR Lupe radar observation satellite, will also be invited to join.

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NEWS IN BRIEF / KURZMELDUNGEN

NASA's Genesis mission is officially open for business, as it extends its special collector arrays to catch atoms from the solar wind. The atoms it collects, believed to have been part of the solar nebula "cloud" from which our solar system developed, will help scientists gain a better understanding of the conditions in the distant past before the Earth and other planets formed. Genesis, managed by NASA's Jet Propulsion Laboratory (JPL), Pasadena, Calif., is the agency's first sample return mission since the last Apollo mission in 1972, and the first ever to return material collected beyond the Moon.
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Lockheed Martin formally delivered the first C-130J-30 for the U.S. Air Force during ceremonies on Dec. 2 in Rhode Island. The 143rd Airlift Wing, the Air National Guard Unit based at Quonset State Airport, will operate the new aircraft. The 143rd will receive three C-130J-30 aircraft this year from Lockheed Martin's Marietta, Ga., production facility. These are the first of the "stretched" C-130Js to be operated by any unit in the U.S. The current plan calls for replacing all nine of the wing's 1960s-vintage C-130Es over the next several years.
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Boeing has signed a foreign military sales (FMS) agreement with the U.S. government to upgrade 35 Egyptian AH-64A Apache helicopters into next-generation AH-64D Apaches. Egypt initially announced its intention late last year to remanufacture its Apache fleet. The U.S. Army authorized Boeing to begin procuring long-lead items earlier this year. Deliveries to Egypt are scheduled to begin in 2003.The FMS contract for the Egyptian Army Apaches, which includes associated spares and ground support equipment, is valued at approximately $400 million, including the aircraft, ordnance, spares, training and support.
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Underscoring its commitment to enhancing the security of the air transportation system, The Boeing Company announced that it has submitted to its airline customers a proposal describing specific product offerings that meet the recommendations of the U.S. Department of Transportation Rapid Response Team on Aircraft Security. Since airlines have implemented the immediate 90-day security recommendations, Boeing's proposal will help them implement the more permanent, long-term enhancements. The proposal addresses ways to meet new requirements for strengthened flight-deck doors, position-tracking transponders that cannot be switched off in an emergency; a cabin-to-flight deck crew-awareness system; and video surveillance of the flight deck entrance.
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The CFM Project TECH56 validation phase continues its highly successful progress with the 68-inch, hollow swept wide chord fan currently undergoing mechanical, performance, and acoustic tests on a modified CFM56-5C engine. Project TECH56 is a technology acquisition and maturation program of CFM International (CFM). CFM, the world's leading aircraft engine manufacturer, is a 50/50 joint company between Snecma Moteurs of France and General Electric of the United States. The Snecma-designed fan has undergone more than 50 hours of rig and ground tests this year. The fan just completed initial acoustic testing at GE Aircraft Engines' Peebles, Ohio, outdoor test facility to characterize its noise signature and is undergoing 2.5-, 4-, and 6-pound bird ingestion rig tests at Snecma facilities in Villaroche, France. Thus far, the fan has met or exceeded design point flow and efficiency goals. Tests completed to date include: verification of the mechanical integrity of a new aluminum fan frame with integrated outlet guide vanes (OGVs); validation of the aeromechanics of the hollow aft-swept fan blades; design point performance; and fan acoustic mapping, using a variable fan nozzle which allows evaluation at different pressure ratios. Early next year, CFM will conduct performance mapping at Villaroche then return the engine to Peebles for crosswind testing. A full-scale engine blade-out test is scheduled at Villaroche for late 2002.
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Airbus is introducing a set of temporary measures to support customers who are suffering from the current economic downturn. Customer Services' action plan features measures designed to alleviate financial difficulties by reducing workload and costs, and will involve Airbus suppliers and vendors in a concerted effort to help customers weather the recession. Firstly, Airbus has introduced a six-month freeze of its price catalogue for spare parts, goods and services to improve customers' cash flow situations. Airbus is also absorbing the engineering and certification costs related to new cockpit security modifications, and will provide the modification kits at reduced prices. As many airlines may need to re-structure their organization and operations, Airbus will offer pilot training at a reduced price. Airbus will also offer additional training in materiel cost optimization free of charge, to help reduce customers' workload and associated costs. Finally, Airbus is offering a free six-month trial period of AIRMAN, a smart maintenance software tool that significantly enhances airlines' aircraft maintenance operations, improving operational reliability and reducing costs.
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The U.S. Air Force has issued an Acquisition Decision Memorandum that approves full-rate production for Raytheon Aircraft's T-6A Texan II primary trainer. The decision, known as Milestone III, is a confirmation that the T-6A meets all U.S. Air Force and U.S. Navy requirements, and that the program is ensured a long-term future. The services are expected to purchase nearly 800 of the aircraft through the year 2017. The T-6A training system became operational at Moody AFB with the class of student pilots in November 2001. In addition the T-6A has won the two major international competitions. The NATO Flying Training in Canada (NFTC) program flies 24 T-6As and has been training student pilots for a year, and the Hellenic Air Force of Greece started student pilot training in September 2001 with delivery of 17 of the 45 aircraft ordered.
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A prominent helicopter operator in Indonesia has taken delivery of two MD Explorers, the first ever purchased for offshore oil work. P.T. Airfast Indonesia accepted the aircraft during a Sept. 28 delivery ceremony at MD Helicopters, Inc. (MDHI) headquarters in Mesa, Ariz. The twin-engine MD Explorers will begin operating in December and will be used exclusively for offshore oil support missions in the Java Sea. The aircraft are scheduled to remain in Mesa for pilot and maintenance training until they are shipped to Jakarta in November. The eight-place, NOTAR system-equipped aircraft will carry crews and equipment to platforms off the coast of Java for BP.
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On 30 November, the first-ever transmission of an image by laser link from one satellite to another took place. The system, called SILEX, consists of the Opale terminal on Artemis and the Pastel terminal on the SPOT 4 satellite. It was designed in close cooperation between the European Space Agency (ESA), the French space agency (CNES) and manufacturer Astrium with over 20 European contractors involved. The terminals exchange high-definition imagery data at 50 megabits per second. Artemis subsequently beams the data at its leisure to the receiving station operated by Spot Image at Toulouse, using a conventional 20 GHz radio link. In the past few weeks ESA, CNES and experts from Astrium have performed a battery of tests to validate the performance of a laser link established between ESA's Artemis spacecraft, operating at an altitude of 31 000 km, and the CNES SPOT 4 satellite orbiting at 832 km.
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Lockheed Martin Aeronautics Company was awarded a $1.1 billion contract on Dec. 5 to begin the system development and demonstration (SDD) phase of the Air Force's C-5 Reliability Enhancement and Reengining Program (RERP). The C-5 RERP, determined by the Air Force to be the most cost-effective way to meet its future heavy airlift needs, is the second phase of a comprehensive modernization plan for the C-5 airlifter fleet aimed at increasing fleet availability and reducing total cost of ownership. The RERP focuses on upgrading the aircraft with modern commercial engines and systems and making minor structural enhancements to ensure the C-5 fleet is operationally viable until at least 2040.
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Airbus has begun construction of the first major component assembly hall for the new A380. Today, the first foundation pile for the A380 hall on the Mühlenberger Loch site in Hamburg was put into place. Over the coming weeks more than 2,100 foundation piles will be driven into the ground to support the new building. "We are pressing on with preparations to build the A380, which is a long-term strategic investment in the future of aviation," said Noel Forgeard, Airbus President and Chief Executive Officer. "We are fully committed to this programme which will bring the market the right product, with the right economics, at the right time." To date, Airbus has obtained 97 firm orders and commitments from nine customers for this all-new 21st century jetliner which will enter service in 2006. The major component assembly hall will be roughly 230 m long, 120 m wide and 26 m high. The laying of the foundation stone for this new A380 hall is scheduled for March 2002 and the hall will be completed by early 2003.
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The launch of Canada's MOST Satellite and of the Czech MIMOSA satellite on the Rockot launch vehicle in the fourth quarter of 2002 was announced by Eurockot Launch Services in Bremen. Both satellites will perform scientific missions in Low Earth Orbit (LEO) as part of a multiple payload mission from Plesetsk Cosmodrome in Northern Russia, where Eurockot maintains its dedicated launch facilities. The flight will demonstrate Rockot's capability to inject satellites into various orbits during one flight: The Canadian satellite will be deployed into a sun-synchronous orbit, the Czech satellite into an elliptical orbit of the same inclination. Eurockot Launch Services offers shared launches on Rockot to operators of small commercial and scientific satellites. The mission in 2002 is a low cost launch opportunity for international customers to deploy satellites into a sun-synchronous orbit from Plesetsk. For this launch a standardized dispenser for multiple payloads will be used.
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Bombardier Aerospace announced two major milestones in the 70-seat Bombardier CRJ700 program. The aircraft has been approved for Reduced Vertical Separation Minima (RVSM) airspace and the Bombardier CRJ700 simulator has been awarded Level D certification. RVSM approval means the Bombardier CRJ700 is equipped with the required altimetry and height-keeping systems to operate at those altitudes were vertical separation is 1,000 feet (305 m) rather than the 2,000 feet (610 m) applicable in non-RVSM airspace. Aircraft equipped for RVSM are thus able to fly at optimum altitudes for better fuel economy. RVSM is currently applicable only in North Atlantic and North Pacific airspace. It will be extended to the airspace over Europe in January 2002, Northern Canada in April 2002, the Middle East in 2003, and the U.S. and remainder of Canadian airspace in the 2004/2005 timeframe.
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Ryanair, Europe's largest low fares airline today announced details of its first ever seat sale in the German market on its ten routes to/from its new Continental European base at Frankfurt Hahn. To celebrate two weeks of record bookings in the German market from today (Thursday 6th December) Ryanair is reducing all of its fares by approximately 30% so that its lowest fare on routes to London, Glasgow and Shannon falls from DEM 99 to DEM 69 one way, whereas the fares on its other European routes to/from Milan, Pisa, Perpignan and Montpellier are reduced from DEM 129 to DEM 99. These lowest ever fares in the German market will be available for sale for a 10 day period only up to midnight on Sunday 16th December and are available for travel to/from Frankfurt Hahn until the 15th March next.
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U.S. Air Forces in Europe officials recently implemented two initiatives aimed at improving productivity and efficiency in the maintenance career field. USAFE introduced the initiatives, Action Workouts and Six Sigma, in fiscal 2000 and the results are promising, said Brig. Gen. Art Rooney, USAFE director of logistics. "Affordable readiness should be at the forefront of all our thoughts," Rooney said. "To maximize our limited resources, we need to provide our personnel with the tools to make fact-based decisions that deliver the greatest return on investment." Action Workouts, called AWOs, capitalize on the power of teams to reduce wait time and reorganize workspace. AWOs are often used to look at processes that are measurable and repetitive. Increasing aircraft availability in the command has been the focus for the past year, officials said. USAFE has conducted four logistics AWOs in the command since October 2000. Three of these focused on the aircraft phase/isochronal maintenance process, and the other looked at the LANTIRN targeting pod, used on the F-15 Eagle fighter jet.
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The Hessian Ministry of Economics, Transportation, Urban and Regional Development has approved Fraport AG's request to increase airport charges at Frankfurt by an average of 3.2 percent effective January 1, 2002. An increase of 2.1 percent on the 2001 volume of charges was needed to cover current operating costs. The balance of 1.1 percent is required to finance current expenditures for preparing the urgently needed airport expansion, e.g., the cost of the regional planning procedure. In particular, the revised schedule of charges brings a noticeable hike in charges for noisy aircraft flying into and out of Frankfurt Airport at night. Thus Fraport AG is consistently implementing an important element of its ten-point action program. Transfer passenger charges remain unchanged. This will strengthen the hub function of Germany's largest airport, because roughly 50 percent of all traffic at FRA is composed of connecting passengers who make their transfers at Frankfurt and head out again to their final destination.
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Gulfstream Aerospace Corporation, a wholly owned subsidiary of General Dynamics, has been awarded a contract with a potential value of up to $206 million to supply and support three Gulfstream V business jet aircraft to the Israeli Ministry of Defense for use as Special Electronic Mission Aircraft. The role takes full advantage of the Gulfstream V aircraft's exceptional high altitude endurance and low operating cost. The contract includes a firm, fixed-price agreement valued at some $174 million, with an option for a second 10-year customer logistic support program valued at $32 million. Following manufacture at the Gulfstream facility in Savannah, Ga., as well as required interior and exterior modifications, mission equipment installation and system integration will take place in Israel. The sale to Israel of the three Gulfstream V aircraft is conditional on meeting all required United States government approvals.
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Inmarsat Ventures plc, a leading global satellite communications company, has welcomed the news that President George W. Bush has signed legislation extending the ORBIT Act deadline for its initial public offering. The new deadline is Dec. 31, 2002, but the Federal Communications Commission (FCC) has authority to further extend it to June 30, 2003. This legislation, combined with an FCC ruling in October granting access rights for several Inmarsat partners, means that with immediate effect businesses in the U.S. will be able to benefit from the same robust and reliable high speed data and voice communications services other customers around the world already experience. As a former Intergovernmental Organisation, Inmarsat was restricted from conducting business in mainland United States except in the coastal waters around the country and in the skies overhead under the terms of the ORBIT Act of 2000.
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The Sagem SPERWER-LE (Long Endurance) UAV made its maiden flight this week in France-Mourmelon. The new 6.2 m-wingspan UAV is 100% compatible with the standard SPERWER system and its operational and logistics environment. It is the only long endurance tactical UAV operating in all-weather from totally unprepared ground (take-off and recovery). The flight demonstrated expected performances, such as endurance greater than 12 hours, climbing speed of 12 m/s, and assessed the capacity of the air vehicle to reach a ceiling of 20,000 feet. This flight opens the way to new missions of SPERWER for roles like pseudo-satellite relay, missile alert detection, fire and forget missile strike.
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Europe's largest defence and aerospace company EADS European Aeronautic Defence and Space Company is expanding its defence business in the sensitive field of Information Warfare. As announced by EADS, Ewation GmbH, Ulm/Germany, a subsidiary of EADS Naval & Ground Systems, is forming a joint venture in the field of Electronic Warfare with the South African electronics manufacturer Grintek Group Ltd, Pretoria. The joint venture, named Grintek Ewation (Pty) Ltd, Pretoria, is held by EADS Ewation with 45% of the shares and Grintek Group (55%). Within the joint venture, a competence center is created for manufacturing and engineering of products, which will be integrated into Ewation's comprehensive EW systems. The new joint venture together with EADS Ewation in Germany has a workforce of about 400 employees with expected annual revenues of $120 m. Ewation is the supplier of electronic warfare, strategic monitoring and surveillance systems. Its joint venture expands the existing strategic partnership with Grintek started two years ago. Within this partnership under the trademark of MRCM (Monitoring, Reconnaissance, Countermeasures) the whole spectrum of Signals Intelligence and Jamming Systems are offered. The partnership meanwhile has been joined by Herley, New York, and Sysdel, Pretoria.
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