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Air Nuigini has leased one of Aircruising Australia's two Fokker F27 Friendships for flights from Port Moresby into volcano ravaged Rabaul. The F27 has been in PNG since late October and is leased on a month-by-month basis, using Aircruising pilots and Air Nuigini cabin crew. Rabaul was previously served by F28s but the permanent airport is closed. The F27 flights operate into a gravel strip approximately 25km from town. Air Nuigini's Dash 7s could operate to the strip, but they are already heavily utilised for flights to centres in PNG's highlands. (Keith Anderson)
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Rolls-Royce Buys Allison
Rolls-Royce has agreed to purchase the Allison engine company from finance house Clayton, Dubilier and Rice for $US525m on a debt free basis. Rolls-Royce intends making an equity issue to finance the purchase, with settlement not expected for three or four months while approval for the deal from US authorities is obtained. Allison’s former owner – General Motors – rejected offers from Rolls-Royce and other companies to purchase the engine manufacturer in the late 1980s, settling for a management buyout backed by Clayton last December. The combination of Rolls-Royce and Allison creates an entity offering the world aviation market a wide range of civil and military turboprop and turbofan engines ranging from the 250 series of turboprops largely for light helicopters to the Trent turbofan for widebody airliners. A possible sale in the near future is for a large number of Allison T406 turboprops for the C-130J Hercules if the aircraft is ordered for the Royal Air Force in preference to the European FLA.
The TPC Blocks Qantas/BA Plans
The Trade Practices Commission (TPC) has blocked a Qantas/British Airways plan to pool resources on the Kangaroo Route under the terms of their Joint Services Agreement (refer Airline Affairs this issue). The basis of the agreement was to abandon ‘open slather’ competition between the airlines on the route and fix fares, schedules and capacity. An estimated $90m in annual savings would have resulted. The TPC ruled it was not satisfied that the public benefits of the profit and revenue sharing deal would be greater than the loss of competition. According to TPC chairman Allan Fels: “If it went ahead there is a risk to consumers from higher prices, less availability of discounted seats and a reduction in price competition generally. Price fixing between competitors… is one of the most serious forms of anti competitive conduct”. One question which arises from this is whether or not Qantas and BA are really competitors as the former owns 25% of the latter. The airlines can appeal the decision to the Trade Practices Tribunal and neither airline was impressed with the TPC decision. Executives from BA and Qantas will be meeting with Prof Fels prior to Christmas to discuss how they may be better able to resolve the doubts the TPC has over their original submission with the hope that both airlines will win approval prior to Qantas going to the market in the second quarter of next year.
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