Winner: Lockheed Martin
Location: Bethesda, Maryland, USA.
Achievement: Taking consolidation of the world aerospace defence industry to a new scale with the success of its giant merger.
There is little doubt that the merger of Lockheed and Martin Marietta was the landmark event of 1995 for the world aerospace industry. If the group continues to deliver on its promised post-merger benefits, it may yet prove to be the deal of the decade.
At a stroke, the merger created a defence-aerospace giant on a new scale. With sales of $23billion, mostly in military markets, the new company now dwarfs its nearest rivals and has unseated Boeing as the world's largest aerospace company.
The merger, which was completed in March 1995, has brought together a series of worldscale operations. The new group has a formidable presence in military aircraft. The $6.6billion aeronautics division has products ranging from the C-130 transport and F-16 fighter, through to the F-117 and the F-22 new generation stealth aircraft. The space and strategic missiles business now has revenues of $7.5 billion, while the electronics and information services segments contribute another $3-4 billion each.
Lockheed Martin has already set about taking advantage of its new-found scale. The group estimates that post-merger consolidation will yield annual savings in the region of $1.8 billion, while it is also looking to make use of the financial strength and technological leverage within the enlarged group. So far the consolidation appears to be on course, with the group reporting a 17% growth in net profits in 1995 and generating $880 million in free cash.
The scale of the merger has set the pace for consolidation throughout the industry, with competitors on both sides of the Atlantic forced to review their own strategies in the light of the deal.
At the start of 1996, Lockheed Martin further underlined the point by pulling off another major coup when it agreed to buy the bulk of Loral for $9.1 billion.
Dan Tellep and Norm Augustine, the chairmen of Lockheed and Martin Marietta are personally recognised with this year's Aerospace Personality of the Year Award.
Finalist: Air Malta
Location: Luga, Malta
Achievement: Launching Malta as a mini-hub and expanding scheduled services to increase the island's otherwise limited growth potential.
Air Malta's niche in bringing tourists to its small Mediterranean home has served the carrier well over the past couple couple of decades, but the airline's management realised that it needed to find new markets if it was going to continue to grow.
Faced with the fast-approaching saturation of the island's tourist market, the airline set out on a two-pronged strategy. First was to exploit Malta's geographical position in the centre of the Mediterranean to create a mini-hub. Second was to build Air Malta's role as a scheduled carrier, so escaping the seasonal troughs of the tourist business.
The airline started by acquiring four Avro RJ70s to replace ageing Boeing 737-200s. The new regional jets allowed the airline to step up frequencies on very-short-haul routes, while also keeping thinner routes open during the low season.
Its three newer Boeing 737-300s and two Airbus A320s were reconfigured from high-density charter layouts, while the airline also opened a new business-class lounge.
Air Malta began 13 new scheduled routes and expanded its previously European-orientated network to include new destinations in the Middle East.
The next goal is to exploit largely untapped long-haul traffic markets such as North America and Australia, but the airline plans to test the water in partnership with other airline partners before committing to any major aircraft purchases.
Location: Aeroport Nantes-Atlantique, France
Achievement: Taking advantage of the opportunities for new partnerships within Europe to achieve dramatic growth.
WHILE OTHERS have struggled with the changes taking place in the European air market, French carrier Regional Airlines has taken full advantage of the new opportunities on offer to produce dramatic and highly profitable growth.
Over the past three years, the airline has replaced its Fairchild Metros with a fleet of 20 modern turboprops, including eight Saab 340Bs and two new Saab 2000s, with a third to arrive in 1996. Three 50-seat Embraer EMB-145 regional jets will also arise in 1997.
After the merger which created Regional from two French airlines, much of its growth has been outside the country. A deal was struck with Spanish flag carrier Iberia, under which Regional took over links between the French provinces and Spain. Today, the Spanish market accounts for 44% of Regional's foreign sales.
Regional also signed a deal with Swiss carrier Crossair to operate a joint service between Bordeaux and Geneva after Air France quit the route. A similar agreement has been added with Portugalia for routes into Portugal.
Since 1992, Regional has seen passenger volumes treble to 345,000. In 1995 alone, revenue grew by 47% and net profits rose threefold.
Source: Flight International
