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Recriminations Fly After EADS-BAE Merger Talks Collapse

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Recriminations Fly After EADS-BAE Merger Talks Collapse ISSN 1718-7966 OCTOBER 15, 2012 / VOL. 360 WEEKLY AVIATION HEADLINES Read by thousands of aviation professionals and technical decision-makers every week www.avitrader.com WORLD NEWS Emirates’ Australian fine A merged Emirates agreed to pay a fine of EADS and BAE, which A$10m ($10.2m) to settle a case would have launched by the Australian Com- become petition and Consumer Commis- the world’s largest sion in 2009, claiming that the aerospace Dubai-based carrier was part of a company cartel that fixed surcharges for fuel by sales, collapsed last and other prices in the air freight week under market. Emirates is the 10th airline the weight to concede that it had acted ille- of political obstacles gally, with cases against Singapore Airlines, Cathay Pacific, Air New Zealand and Thai Airways still to BAE be heard. The Emirates settlement brings the total amount in penal- ties to date to $A68m. Recriminations fly after EADS-BAE merger talks collapse Backers lament lost chance to depoliticize EADS, consolidate European defence Grounded Kingfisher Europe’s attempt to create the the new company, but as Enders Beleaguered Indian carrier King- EADS without BAE world’s largest aerospace and de- fisher Airlines cancelled all flights himself said in a letter to EADS 2011 sales by division (%) fence firm failed spectacularly last employees, he had ‘never imag- until October 20th as pilots, tech- Company Division % sales week after talks between the Brit- nicians and engineers, many of ined facing such opposition to the ish, French and German govern- Airbus Airplanes 66 whom haven’t been paid since deal, particularly not from Berlin’. ments foundered over what some Cassidian Defense 11 March, extended their two-week have labelled political ‘bickering’, It is still unclear if the deal was long strike. Kingfisher, which holds Eurocopter Helicopters 11 with Germany taking much of the vetoed by Angela Merkel, the debts of $1.5bn and has never Astrium Aerospace 10 early blame. German chancellor, over fears turned a profit since it launched that Germany would end up as Other 2 in 2005, received a letter from the The proposed merger between UK a ‘lesser’ partner, or if, accord- Total sales €49bn aviation regulator asking why its defense giant BAE Systems and ing to sources in Berlin, a dispute Deutsche Bank, Der Spiegel licence should not be cancelled, EADS, the European aerospace between London and Paris over after failing to provide a ‘safe, ef- group, had been championed France’s eventual share in the EADS with BAE ficient and reliable service”. by the two companies’ respec- merged company led to the deal’s tive chief executives, Sir Ian King Division % sales Ex-Im loan to flydubai ultimate collapse. and Tom Enders. Writing in The Defence and security 43 The US Export-Import Bank au- Merkel’s concerns were based on Financial Times, Karl-Theodor zu Civilian aviation 41 thorized a $117.5m loan guaran- Guttenberg, a former German de- fears that investment - and jobs Helicopters 7 tee supporting exports of Boeing fence minister, said their proposal - would flow to UK and French aircraft to flydubai, the low-cost was ‘visionary’, and based on sites, leaving Germany marginal- Aerospace 7 carrier based in Dubai. Accord- sound industrial logic that ‘would ised in the deal. Guttenberg said Other 2 ing to Arabian Business, the Ex-Im have delivered real synergies and the deal-breaker was Merkel’s de- Total sales €73bn Bank will guarantee a 12-year loan cost savings, and increased com- mand that the future EADS-BAE Deutsche Bank, Der Spiegel from the Private Export Funding petitiveness for all involved’. corporate headquarters be based Corp. The carrier’s CEO, Ghaith in Munich, an example of how It became clear that a successful particularly in Bavaria, a year be- Al Ghaith, said he was ‘delighted’ ‘big projects and ideas can fail outcome to the talks would de- fore national and state elections, with the support, adding that he over rather small details’. believed it was the “right time, in pend on containing the political was almost certain to heighten re- flydubai’s third year of operation, influence of France and Germa- There is no doubt that the deal sistance - and should have come to diversify the sources of funding ny, which were both determined was highly politically sensitive. as no surprise, according to Der for our aircraft”. to maintain significant stakes in Any hint of German job losses, Continued on page 4 Ten Years and Still Climbing Ten years ago, a small team set-off with a vision to build a company focused on providing services to the airline industry. This vision has materialized into a team nearly 300 strong and a quarter of a billion in revenues. It seems that the impossible, is possible, indeed. Aircraft & Engine Leasing - Component Support & Supply Chain Services - Maintenance Repair & Overhaul We would like to thank our customers, vendors, partners and friends for their dedication and support over the past ten years. And Congratulate the very dedicated team that helped make this happen. YOU ARE ALL PART OF OUR FAMILY. If you’re seeking to make an impact on the world of tomorrow while ensuring a bright future for yourself — GA Telesis is the place for you. We offer talented individuals the resources they need to succeed on both a professional and personal level. We are a diversified, financially-sound employer with a world-class reputation. Our culture rewards initiative and emphasizes learning. Our team approach encourages your individuality while providing you with vital support. Plus, we provide one of the best employee benefits packages in America. www.gatelesis.com 3 AviTrader WEEKLY AVIATION HEADLINES AIRCRAFT & ENGINE NEWS Embraer delivers 35 commercial and 20 executive jets in third quarter In the third quarter of 2012, Embraer delivered 27 jets to the commercial aviation market and 13 to executive aviation. Deliver- Alaska Airlines expands CFM-pow- ies for the year end-September, total ered Boeing 737 fleet 83 commercial and 46 executive jets, Alaska Airlines placed the largest order in its seven more than for the same period history, announcing the purchase of CFM en- of 2011. The mid-size Embraer 190 gines to power 50 new Boeing 737 aircraft. family accounted for 66 deliveries, or The announcement includes firm orders for 51% of the total. Embraer’s firm order 13 Boeing Next-Generation 737-900ER air- backlog to 30 September stands at An Embraer E-90s delivered in 2012 to KLM Cityhopper planes powered by CFM56-7B engines, in $12.4bn, on 178 firm orders. AirTeamImages addition to 20 737 MAX 8 and 17 737 MAX 9 airplanespowered by the advanced LEAP- medium and long haul routes from the Turk- 1B engines. AWAS delivers first A320 aircraft to Philippine Airlines ish Airlines hub in Istanbul. Turkish Airlines placed their first order with Airbus in 1984, Macquarie AirFinance assists with Dublin-based global aircraft lessor, AWAS, has and now operate 101 Airbus aircraft includ- establishment of Air Cote D’Ivoire delivered the first of two new Airbus A320 ing 17 A330 Family aircraft. aircraft to Philippine Airlines (PAL). The new Macquarie AirFinance, a global aircraft leasing A320s will support the airline’s on-going fleet company based in Dublin, Ireland, announced modernization program in response to region- ITC-Aerospace orders two AW169 that it has delivered an Airbus A319-100 on al demand and expansion opportunities. Helicopters lease to the newly established national airline of the Ivory Coast, Air Côte d’Ivoire. The air- AgustaWestland, a Finmeccanica company, Turkish Airlines orders another 15 craft, a CFM56-5B5/P-powered, 2004-model, announced that ITC-Aerospace of Japan has MSN 2213, configured in 12 Business and 96 Airbus A330 aircraft placed an order for two AW169 light inter- Economy seats, will be based in Abidjan, and Turkish Airlines has placed an order for 15 mediate helicopters. The aircraft will be leased the airline will initially operate it on routes to A330-300s, their seventh order for the A330 to private operators. The contract was signed various West African destinations in partner- family of aircraft and their twentieth Airbus during a ceremony held at Japan Aerospace ship with Air Burkina & Air Mali. order overall. The aircraft will be operated on 2012 in Nagoya. This contract marks the en- >daP__a^PRWc^TeTah ^eTaWPd[XbcWTbP\T caTPcTPRW^]TSXUUTaT]c[h 5X]SP64aT_aTbT]cPcXeT]TPah^d 640eXPcX^] 640eXPcX^] 4 AviTrader WEEKLY AVIATION HEADLINES Continued from page 1 Spiegel, which said that Germany has ‘long shown interest in ex- ‘and you will attract business’. But when it becomes apparent that erting a greater role in EADS’. In fact, the state-owned KfW Bank Germany will not be favoured by a particular deal, Berlin demands is now expected to proceed with taking over German automotive that the rules be changed - as in the EADS-BAE affair’. group Daimler’s 7.5% stake in EADS to shore up German govern- Harsh words indeed from Germany’s strongest partner in Europe ment influence in the company. - and words that were echoed across the channel. The Economist Peter Hintze, a senior government official in the German economics stated that Merkel was ‘wrong to stand in the way of a more inte- ministry and a member of Merkel’s CDU party, said he was ‘con- grated European defence and aerospace industry’. The Americans vinced that EADS can best show its strengths on the global market were happy, it said, for the Germans, French and British to have take- independently’, adding that German over-blocking shares, and suggested that EADS production sites and small busi- Merkel would have had enough influence ness suppliers would benefit from that.
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