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Spanair Keeps MD Planes

August 22, 2008

MADRID -- Spanair SA has no plans to ground its aging fleet of McDonnell Douglas planes after the deadliest aviation accident in Spain in two decades, General Director Marcus Hedblom said Thursday.

A Spanair MD-82 aircraft crashed shortly after takeoff Wednesday, killing 153 people onboard. The aircraft had been in operation for 15 years, company officials said.

Mr. Hedblom said the airplane originally aborted takeoff after the malfunction of an air-intake probe, but mechanics disabled the mechanism, allowing the plane to take off roughly an hour later. Mr. Hedblom said the air-intake probe wasn't part of a list of instruments required for the plane to operate safely.

He said pilots conduct preflight checks on the planes, but mechanics deal with most technical issues.

Spanair, Spain's second-largest airline by passengers carried after Iberia Líneas Aéreas de España SA, has been under pressure amid labor unrest and rising fuel costs, exacerbated partly by its inefficient fleet of MD aircraft.

Following a failed attempt to sell Spanair to chief rival Iberia earlier this year, owner SAS AB last month unveiled plans to shed more than 1,000 jobs at the airline.

"Spanair was in a very complicated situation before the crash and its economic viability was already in doubt," Fortis analyst Manuel Zayas said.

SAS's restructuring plan for Spanair, designed to save about €90 million ($132.7 million) in 2009, also foresees cutting capacity 24% by phasing out 15 MD aircraft from a total fleet of 65.

Meanwhile, Spanish flag carrier Iberia is phasing out its remaining 11 MD aircraft from its fleet, replacing them with more-modern Airbus planes. Airbus is a unit of European Aeronautic Defence & Space Co.

A few hours before Wednesday's crash, pilots union Sepla threatened to strike in response to Spanair restructuring plan. A Spanair spokesman said the airline is honoring previous agreements with labor unions.

Source: http://online.wsj.com By JASON SINCLAIR and BERND RADOWITZ