Fairchild Dornier On Track With Finance, Programs

One year after an injection of $400 million of growth capital, Fairchild Dornier has achieved its initial goals to establish financial stability for development of the 728JET family, production of existing aircraft, customer support programs, and the strengthening of company employment.

"This has been an extraordinary year for our company," said Fairchild Dornier chairman Chuck Pieper.

"The recapitalization (in cash, loans and credit facilities by Clayton, Dubilier & Rice and Allianz Capital partners) and the implementation of the new company strategy firmly establishes Fairchild Dornier as a major player in the global marketplace for airliners in the under-110-seat, business jet and government programs segments," Pieper said.

The company already had in place an excellent product line as well as a sound business plan in a market segment predicted to be worth $200 billion worldwide over the next 20 years, he said. What had been needed was investment in people and processes to enable the company to capture its share, and the recapitalization has made that possible. "We're building a company, as well as an airplane, and we're on course with both objectives," Pieper said, noting that aircraft production rates will increase towards 180 per year, while revenues are forecast to reach $5 billion a year by 2008.

The Fairchild Dornier outlined some notable achievements of the past year:

• Installation of new CEO Lou Harrington, new customer support leaders and managers for aircraft programs and production and supply chains, and the hiring of hundreds of design and production engineers;
• Implementation of new processes for production, supply chain, customer support and aircraft design and reorganization of internal processes to be more customer responsive and efficient;
• Strengthening of customer training operations for Fairchild Dornier products and selection of FlightSafety International and Lufthansa Group as training providers; and
• Relocation of company headquarters to Oberpfaffenhofen, Germany and establishment of a global marketing office near Washington, D.C.

One year on from the recapitalization, the value of Fairchild Dornier's order backlog has grown 50% to $12 million, despite cancellation of the 428JET program.

Production of the 328JET is currently running at four per month, with 62 aircraft delivered. In-service statistics show 99% dispatch reliability.

The 728JET program moved from design to production at the end of 2000 and is on track for first flight in the spring of 2002 and customer deliveries in mid-2003. Three airframes are currently being manufactured. The first wing is in assembly at EADS-CASA in Spain; the forward fuselage is being built at SABCA in Belgium, and the first tailcone has been completed by MAN Technologie in Munich and delivered to Honeywell for functional testing of the APU. Three fuselage sections are in production at Fairchild Dornier's new facility in Germany, where functional testing of the 728JET's electrical and hydraulic systems has begun on an engineering test rig that will be linked to an engineering cockpit simulator later this year.

More than 100 hours of wind tunnel testing has been completed on the 928JET program to validate wing and fuselage designs and establish performance parameters.