EOAC Delegation Visits Rolls Royce
In the last week a number of top executives have visited the Rolls Royce facilities in the UK with the stated aim of strengthening existing ties and to discuss the purchase of Rolls Royce Trent powerplants. While EOAC have not yet committed to the Airbus A340-500/600 series this gives a clear indication of the interest we have in this aircraft and in the longer term, the A3XX.
While Heathrow at present remains unable to handle the A3XX EOAC remain positive that the authorities will make the decision to allow work to proceed to enable the aircraft to operate on the high density US routes. With Airbus offering substantial incentives should this aircraft be ordered before January the Board of Directors are due to meet with the EOAC shareholders in the next few weeks.
Also discussed were the BMW Rolls Royce BR715 units offered with the Boeing 717. Currently EOAC has an interest in this aircraft with the intention being to lease to a US owned franchise (see below).
Chairman Chris Williams was keen to point out that although no order was placed it was evident that Rolls Royce would be able to play a major part in the development of the European Overseas Airways Company over the next ten years.
EOAScandinavia Project Receives Authorisation
A project group has been formed to assess proposals for increased coverage of the Scandinavian and Baltic regions. A preliminary route network is being discussed with the relevant authorities and risk sharing partners are being sought to bring about an increase in the scheduled services to the area, which currently has very poor coverage.
The Board's current plan is to franchise the operation, which will be based at Copenhagen, to a local operator, wet leasing aircrafts in the EAC livery and contracting aircrews to the operator in order to maintain a seamless network.
The final choice of Copenhagen as a base was due primarily to the good relationship with Duckling Air and although there are no current plans for Duckling Air to sign as a major partner in The Alliance the possibility that the routes may be sold to a future partner in the area remains strong.
A final decision on EOAScandinavia will be made in January.
The Alliance Receives Major Blow...
Jim Youngken, CEO of Rogue Air has announced that he intends to cease all operations. Despite this major blow to the world-wide aspirations of EOAC through it's proposed network; The Alliance, the Board of Directors remain upbeat and positive for the future.
More to the point we feel that we still owe a great debt to Jim and to Rogue Air. Jim gave us one of the great airlines, building it almost single handedly from nothing. His contribution to EOAC has been immense and we can only thank him for his devotion and work.
The Board of Directors of EOAC wish all member so Rogue Air, management and pilots, all the best for future projects. Hopefully one day Rogue Air will return to our skies.
...US Expansion Plans Moved Forward?
With the passing of Rogue Air is has become clear that EOAC needs a major US Partner in order to maintain market position. With this in mind, we have opened negotiations with the US authorities regarding such a move. US legislation causes considerable difficulties with regard to foreign owned airlines to be overcome but the authorities have responded favourably to a proposal in which a US based operator would be set up with leased aircrafts and aircrews under an EOAC granted franchise. The legislators have advised that an operation based in the Midwest would be viewed positively.
EOAC Director Serge Lukic is now bound for the US in a move that will hopefully clear the way for planning to begin. Meetings with a number of possible franchise partners have been scheduled.
Despite this move EOAC Chairman Chris Williams maintains that such a move will not eliminate the need for a Major Partner in the US and/or Canada. He states "In order to meet our mission statement goal we urgently need an international presence in North America."
The EOAC Chairman goes on to say that "Any move we make in the US will be designed to augment operations by a possible partner. We are actively seeking possible partners now but have yet to make any formal approaches due to other Alliance commitments and Negotiations".
Now that a number of discussions with Airbus have been concluded, the board have turned their attention to Seattle. Discussions are due to take place in the next month regarding the possibility of orders being placed for the 717, 737 and 757. With the EOAC holding company now conducting discussions on behalf of all of the EOAC Divisions the team are looking closely at the requirements of the world-wide fleet for the next decade. Nothing has yet been ruled out and it is very likely that the 767 and 777 will also be on the agenda, along with the proposed 747 stretch.
No News on Dash 8
Despite expressing a strong interest in the Dash 8-Q400, EOAC have not yet placed orders for the aircraft. The company maintains that turboprop operations will continue but is also keen to look at possible solutions on some routes involving the Avro RJ series, CRJ and proposed Dornier Jets. It is felt that until the market place has been properly evaluated any such order with Bombardier would be premature.
Weather and Fuel Prices Cause Worry
EOAC turnover remained steady in October despite concerns over rising fuel prices and problems at airports caused by weather. Despite the current situation in which the airline is still operating at a loss Chris Williams made the following statement during the November Board Meeting:
"The current climate is difficult but should not affect our plans. We have until 2010 to return to profitability and this means that are in a situation requiring careful planning rather than reactions to current problems. The future of all company divisions is secure for the immediate future. We have invested heavily and further investment is required if we are to become profitable and stay that way. We have our targets and we should concentrate on them"
"There is no avoiding that our plans have slipped. We undertook to achieve a number of things before January 2001 and it is now clear that some targets will not be met. Despite this we will not be pushed into making our goals more achievable. In the past two months events have conspired against us but this will not always be the case If we make our goals more modest we are betraying everyone who ever placed faith in us. We will not be deflected from our targets"
The third quarter financial statement is expected shortly.