what about Canada which proportionate to its size played an even larger role in freeing Kuwait, and in specialized product areas, is the best in the world. Yes. Larger. And yes, the best.

Canadian marketers have been figuratively walking across broken glass to jump through all kinds of proverbial hoops just to get recognition in Kuwait City. Albeit, Kuwaitis have been courteous and hospitable, but perhaps Canadians have not been loud enough. [That's our way of doing things.]

Well. May we please have your business?

Kuwait — in the midst of a deluge of pushy cigar-smoking salesmen with Alabama accents and names like "C.J.", and pipe-toting Lord polo players apparently schooled within the shadows of Windsor Castle — may have forgotten the significant contributions made by Canada in the Gulf War itself; in the clean-up afterwards; the peacekeeping and humanitarian measures instigated by Canada also in the aftermath of the Gulf War; and the assistance provided to Kuwait by Canadians to restart the Kuwait oil industry. (Our salesman is the polite chap in the ante room with his hat in his hand.)

Moreover the products and technical support Canadians have to offer as solutions to Kuwait's stated requirements — air defence/anti-tank systems, state-of-the-art corvettes, land vehicles, surveillance systems and platforms, and transportation equipment — are the very best anywhere.

A short-coming of Canadians, collectively, is being too shy to blow our own horn. And not being pushy enough. Well, now hear this horn blast. (We can't be pushy. It's so un-Canadian.)

Oh, and don't listen to the financial papers' blow-hards yakking about the Canadian dollar and our economy. We know exactly what we are doing. Just remember that with those U.S. Federal Reserve bucks in your coffers you can buy nearly 50 percent more goods in Canada. So don't be shy. Send your pals with their shopping lists over here to Aurora, Ontario. We'll get you started.

And if you need to know what we did to help out during the Gulf War... well for one thing, we, The Wednesday Report, (nick-named in Baghdad as WOW, meaning War On Wednesday) gave Saddam the biggest headache he has ever had in his life. And then some. -- Micheal John O'Brien

Canada's Aerospace & Defence Weekly

Volume 9, Number 4

Comment:

We have a friendly message for Kuwaiti Sheikh Ahmed al-Hammud al-Jaber al-Sabah and all his fellow government leaders.

Our External Affairs Minister, The Honourable Andre Ouellet was in Kuwait City on the weekend, and for our money, he was in the right place at the right time. It wasn't his pleasure to see our reader the Defence Minister who was not well at the time and thus wasn't receiving guests, but the Canadian minister did make an impact overall.

Among the Canadian companies — all centres of considerable excellence — seeking new business in your thriving emirate are: Saint John Shipbuilding, Oerlikon Aerospace Inc., Babcock and Wilcox, Western Star Trucks, and international transportation giant, Bombardier. Each of these Canadian firms sent delegates with Minister Ouellet to have talks with your Kuwaiti officials.

What has got our goat, is that Britain and the United States, not Canada, have benefited enormously from new trade with Kuwait as a consequence of more visible manpower and materiel contributions to the 1991 U.N. coalition to oppose Iraq's occupation of Kuwait, your beautiful country.

Certainly those two nations played a significant role in the war against Saddam's tyranny, and concurrently are capable of offering a broad range of products based on ample technical excellence, but,

Publisher and Editor In Chief: Micheal John O'Brien

Editorial Staff Writer:

Frederick J. Harris

Contributing Editors:

Jim Henderson (Toronto)

Mike Martin (Ottawa)

Patrick McManus (Halifax)

William Kane (Washington DC)

John Reed (London, England)

Moshe Karem (Jerusalem, Israel)

The Wednesday Report is published weekly by

MPRM Group Limited, 15221 Yonge Street,

Suite 201, Aurora, Ontario, Canada L4G 1L8. Telephone: (905) 841-1277 Facsimile/Data: (905) 841-4389.

Subscription Rates: first class mail delivery $550 yearly, express delivery $715 yearly, single copy $15.

ISSN 0835-6122

Copyright: ©MPRM Group Limited 1995.

All rights reserved. Reproduction in part or in whole,

in any manner whatsoever, is strictly forbidden without attribution.

1 SIGNALS COMES HOME — LOGISTICIANS TAKE OVER IN RWANDA

The United Nations Assistance Mission in Rwanda (UNAMIR) has grown over the past six months and there are now some 5,868 U.N. personnel in that country. Of those, more than 4,900 are infantry deployed across the country and tied together in a communications system set up by 1 Canadian Division Headquarters and Signals Regiment, commanded by Lieutenant-Colonel Mike Hanrahan. The Regiment came home to CFB Kingston last week. Nine members of the unit had their departure delayed until later this week when they will hand over the remaining communications responsibilities to an incoming signals squadron from India.

In handing over communications responsibilities, Canada has taken on new responsibilities for the coordination of UNAMIR logistics elements, U.N. civilian support staff and civilian contractors. 95 Logistics Support Group, commanded by Lieutenant-Colonel Rick Powell, MBE, the former commanding officer of 36 (Newfoundland) Service Battalion, became operational in Kingali on Sunday, January 29.

RECCE PARTY TO HAITI

A Canadian Forces reconnaissance party is in Haiti this week in preparation for the expected participation of a number of air elements in the United Nations Mission In Haiti (UNMIH-II). Although Canada's contribution to the mission has yet to be formally announced it is anticipated it will be comprised of elements of 408 Tactical Helicopter Squadron, an airfield engineering unit based on 1 CEU, and a Military Police airfield security unit. To this end, eight CH-135 Twin Huey helicopters are being painted white and prepared for shipment. They are expected to be ready to move on February 22. The recce party went to Haiti on Monday and will return on February 6.

CATHAY PACIFIC SELECTS CMC SATCOM ANTENNA

Cathay Pacific, one of the world's most successful airlines has selected Canadian Marconi's CMA-2102 High-Gain Satcom Antenna for installation on the airline's Airbus A340-300 fleet. Cathay has placed firm orders for CMC'S Satcom Antenna on six aircraft plus up to 16 options.

Cathay Pacific has apparently reiterated its confidence in Canadian Marconi products since the CMA-2102 will be integrated with the Collins SAT-906 avionics system — the same combination of antenna and avionics that Cathay specified for its B747-400 fleet.

Much of the preliminary engineering and form fit work has already been completed in cooperation with Airbus/Aerospatiale and it is expected that integration and flight testing of the CMA-2102 systems will begin in the summer of 1995. Installations on Cathay's aircraft are expected to start in July 1996.

The Canadian Marconi system is a "user friendly" package which according to the company is exceptionally reliable and easy to install. The 2102 ensures complete commonality of Part Numbers and Software among all aircraft types — with obvious savings in the cost of ownership — particularly for airlines, such as Cathay Pacific, with mixed fleets. The CMA-2102 has now been selected by 17 airlines for installation on a number of wide- and narrow-bodied aircraft.

CANADA/CHILE MOA ON COMMUNICATION DEVELOPMENT

Industry Minister John Manley has announced the signing of an agreement between Industry Canada's Communications Research Centre (CRC) and the Chilean government's Ministry of Transport and Telecommunications to establish a framework for collaboration in telecommunications research and development.

The agreement was signed in Santiago, Chile, last Thursday by Trade Minister Roy McLaren during the trade mission led by Prime Minister Jean Chrétien.

The agreement provides the Chilean Ministry of Transportation and Communications with access to CRC's expertise in communications R&D including spectrum management, remote telecommunications, networks and broadcast technologies.

"This agreement underlines the CRC's international reputation for excellence in communications research," said Manley. "The Centre's increasing participation in such international collaborations helps bring Canadian technology and capabilities to world, and translates into new opportunities for the growth of the telecommunications sector in the National Capital Region and Canada."

Under the agreement, CRC will provide technical consulting services on a cost-recovery basis, technology transfer, exchange programmes and set up conferences and technical symposia. There is no monetary value attached to the agreement. Any CRC technologies transferred will be subject to separate

Page

The Wednesday Report - Copyright 1995

February 1, 1995

licensing agreements.

HMCS TERRA NOVA RESCUES U.S. FISHERMEN

Last week, while on working-up exercises with HMCS Nipigon in the waters off the U.S. state of Virginia, HMCS Terra Nova, commanded by Commander Rick Williams, intercepted a distress message from a U.S. fishing vessel the Valley Wind which was apparently taking on water. Terra Nova responded immediately and dispatched crew members with pumps to the floundering vessel. Valley Wind's bilge pumps were fouled and an attempt to use the pumps from Terra Nova proved fruitless. Accordingly the three crew members were removed and subsequently transferred to the U.S. Coast Guard vessel Port Huron which had arrived on the scene.

ARCHANA SELECTS de HAVILLAND DASH 8 SERIES 200

Archana Airways Ltd. of New Delhi has purchased two de Havilland Dash 8 (x) Series 200 aircraft. Archana will become the first airline in India to operate the new aircraft type designed for "hot and high" airfields when deliveries are completed in September and October this year. The airline will also become the first to operate the de Havilland Dash 8 Series 200 in India when it takes delivery of two leased aircraft in February and March.

"The new de Havilland Dash 8 Series 200 will be used to expand Archana's reach into the tourist areas in northern India," said airline chairman A. K. Bhartiya. "We will continue to initiate new markets with smaller aircraft and ultimately replace them with the Dash 8 when passenger loads justify," he explained.

The airline is exploring new routes in Rajasthan and Leh to serve both business and tourist traffic in those areas, according to Bhartiya.

Late last year, Archana Airways was awarded scheduled airline status by India's Ministry of Civil Aviation allowing it to expand its service network and publish its scheduled flights within the country. Previously only two airlines were designated scheduled airlines st in India. Air India and Indian Airlines.

Offering faster cruise speeds, increased design weights, higher single-engine ceilings and improved hot-and-high performance, the Dash 8 Series 200 shares the Pratt & Whitney Canada PW123 engine, with minor alterations, with the Dash 8 Series 300. With its increased thermodynamic power on takeoff, the Dash 8 Series 200 provides full takeoff power to 45 degree C., which means full design payload capability at ISA plus 30 degrees C. at 5,000 feet ASL.

The Archana Dash 8 Series 200 purchases bring total sales to 413 aircraft. To date, 391 Dash 8 aircraft have been delivered. Combined with Bombardier Regional Aircraft Division's Canadair Regional Jet (x) order book of 104 aircraft, Bombardier is the world leader in the production of regional aircraft.

ROLLS-ROYCE TRENT 800 CERTIFIED WITH "POWER TO SPARE"

Rolls-Royce's Trent 800 engine has been awarded its airworthiness ticket at a thrust rating of 90,000 pounds, making it the first engine to be cleared for flight at that power level.

Certification for the engine, which will power the new Boeing 777 twinjet, has been achieved three months ahead of the original schedule and at a rating 6,000 pounds higher than the initial target. Clearance was granted today by the European Joint Aviation Authorities.

Phil Hopton, Trent project director, said, "This is the most powerful engine Rolls-Royce has built, yet the programme has been one of the most trouble free. At 90,000 pounds thrust we have power to spare and a strong platform for future growth."

The Trent 800 will initially be de-rated in service to thrusts between 75,000 and 84,000 pounds to match customer requirements. The engine will enter service with Thai Airways International early in 1996. It has also been selected by Emirates, Cathay Pacific and TransBrasil.

A weight advantage of more than 6,500 pounds per aircraft over its heaviest rival translates into significant revenue earning advantages for Trent 800 operators.

Future milestones in the Trent 800 programme include first flight on the Boeing 747 test bed in March and the roll out and first flight of the Trent-powered Boeing 777 in April and May, respectively.

Highlights in recent months have included completion of all major development tests. In December, a 150-hour endurance test was completed by an engine running at an average thrust of 94,800 pounds.

Earlier, Trent 800s demonstrated their ability to cope with bird, ice, hail and water ingestion as well as the release of a fan blade at its root at take-off conditions, the meter-long hollow titanium blade being held by the containment system while the engine performed a controlled shutdown with no fluid leaks, fires or loss of structural integrity. The smaller Trent 700 begins commercial service with Cathay Pacific's new fleet of

The Wednesday Report - Copyright 1995

February 1, 1995

Page

Airbus A330s next month.

BOEING's 1994 YEAR END RESULTS/1995 FORECASTS — ($U.S.)

Sales of $21.9 billion and net earnings of $856 million or $2.51 per share for the year 1994 were reported by Frank Shrontz, Boeing chairman and chief executive officer. Comparable figures for 1993 were sales of $25.4 billion and net earnings of $1,244 million or $3.66 per share.

Sales for the fourth quarter of 1994 were $5.1 billion with net earnings of $157 million or $.46 per share, compared with 1993 fourth quarter sales of $5.7 billion and net earnings of $304 million.

The lower earnings in 1994 were primarily due to fewer commercial aircraft deliveries, a higher level of research and development expenditures, increased debt expense, and lower corporate investment income. These factors were partially offset by improved defence and space earnings and a lower effective federal income tax rate.

A total of 270 commercial transports were delivered in 1994, compared with 330 in 1993. Defence and space sales were roughly 8 percent higher, attributed mainly to the Space Station programme.

Shrontz noted that the generally improving performance of the airline industry worldwide must be sustained before substantial new order activity can be expected to occur. Worldwide economic conditions and the financial health of the world's airlines are the principle drivers in determining the timing and extent of the next growth cycle in the commercial jet transport market. In anticipation of returning to a higher long-term demand level for commercial jet transports, Shrontz stated that the Company is making important strategic investments in both new products and business and manufacturing processes. These investment expenditures can be expected to continue to constrain earnings and use cash resources in the near term, but they are expected to have substantial long-term economic benefits and will help ensure the Company is well positioned in the next growth cycle.

The overall operating profit margin on commercial transport programmes, exclusive of research and development expenditures for new and derivative models, was essentially maintained in 1994 relative to 1993. These results were achieved despite the reduced sales levels through efficiencies gained by process improvements in all aspects of operations. The overall commercial aircraft operating margin is expected to be somewhat lower in 1995 as existing programmes' sales levels decline further and deliveries of the new 777 jet transport begin.

Shrontz said he continues to be pleased with the progress of the 777 programme and the aircraft's performance results. Five 777's are currently involved in extensive flight test activities, and as of January 22 they had accumulated more than 750 flights and over 1,700 hours of flight time. In late December one of the 777's began a special 1,000-cycle flight test programme, equivalent to one year's service, to achieve early ETOPS (Extend Twin-Engine Operations) certification as the 777 enters commercial service.

Shrontz also stated that defence and space programmes have continued to perform well in a very challenging environment, increasing operating profit by $84 million in 1994. Although long-term funding levels for Boeing Defence & Space Group's current programmes generally remain somewhat uncertain due to federal budgeting constraints, the Company's defence and space business is broadly diversified among priority government programmes involving military aircraft, helicopters, electronic systems and space systems. Additionally the Company's business is associated with both future production programmes and ongoing modernization activities for existing defence systems.

Based on current programmes and schedules, total sales in 1995 are projected to be in the $20-$21 billion range.

Combined commercial aircraft production, as a rate per month, declined from 321/2 aircraft per month at the beginning of 1993 to 23 at the beginning of 1994, and to 191/2 at year end 1994. During 1994, the 747 production rate was reduced from 5 to 3 per month and the 737 rate was reduced from 10 to 81/2 per month. As previously announced, the 747 rate is currently being reduced from 3 to 2 per month, the 767 rate is being increased from 3 to 4 per month, and the 757 rate is being reduced from 5 to 4 per month. Deliveries of the new 777 model are scheduled to begin in May 1995.

Planned production rates will continue to be adjusted as necessary to match customer requirements. Unfavourable operating results being experienced by certain U.S. airlines may result in further selective production rate reductions, primarily impacting deliveries in 1996.

Total commercial jet transport deliveries for 1995 are currently projected to be approximately 230 aircraft.

Research and development associated with new commercial models and derivatives remained at a high level throughout 1994. In addition to extensive systems integration and test activities for new 777 models, the principal commercial development programmes with significant expenditures in 1994 were the

Page

The Wednesday Report - Copyright 1995

February 1, 1995

extended-range version of the 777 which begins deliveries in late 1996, the Next-Generation 737 family which begins deliveries with the 737-700 in late 1997, and a freighter version of the 767 to be delivered in the fourth quarter of 1995. Research and development expenditures currently planned for 1995 will be below the 1994 and 1993 level.

Boeing's debt interest expense was substantially higher in 1994 compared with 1993 due to less debt interest being capitalized in connection with new facilities and equipment investments. The higher level of new investments in facilities, equipment and tooling in 1993 resulted in most of the Company's debt interest being capitalized on in-process construction for 1993, as required by accounting standards. The reduced levels of new investments in facilities and equipment in 1994 resulted in a lower base over which debt interest is capitalized.

Not included in contractual backlog are purchase options and announced orders for which definitive contracts have not been executed and orders from customers who have fled for bankruptcy protection. U.S. Government and foreign military backlog is limited to amounts obligated to contracts. Non-obligated amounts under U.S. Government contracts not included in backlog at December 31, 1994, total $5.9 billion.

Boeing's cash and short-term investments are projected to decrease over the next several quarters due principally to the continuing inventory buildup on the new 777 jet transport, customer financing requirements, and projected federal income tax payments in excess of income tax expense. The higher tax payments are primarily due to completion of contracts executed under prior tax regulations.

P&W's PW4084 PASSES CRITICAL MILESTONE

The newest member of the PW4000 engine family has passed a critical milestone in what Pratt & Whitney (a unit of United Technologies Corporation of Hartford, Connecticut) describes as "the most exhaustive engine testing programme in commercial aviation".

On Saturday, January 28, a PW4084 engine, used on the Boeing 777, completed 3,000 cycle endurance testing at Pratt & Whitney's facilities in West Palm Beach, Florida. Three thousand cycles is roughly equivalent to six years of airline service.

For the past few months the engine ran through gruelling tests to demonstrate reliability for Extended Twin Operations (ETOPs). In ETOPs operations an airline can fly routes away from the nearest diversion airfield up to a specified limit of one-engine flying time.

Successful completion of the three thousand cycle test is a major step to demonstrate that the 777 and PW4084 are ready for 180-minute ETOPS operations when the 777 goes into service at United Airlines in June.

"We pledged to our customers that we would give them the most robust engines in aviation history for super twin aircraft," said David Crow, senior vice president-high thrust engines. "The PW4084 completed the three thousand cycle test programme with virtually no problems and excellent overall performance. It has earned the Pratt & Whitney motto: Dependable Engines."

During the testing the engine completed three thousand flight cycles: take off, climb, cruise, descent and landing, including full thrust reverse. Pratt technicians rigged it to run at twice the vibration level the engine would ever see in airline service. Mechanics maintained the engine using typical flight line tools, manuals and procedures. In fact, twenty United Airlines mechanics took part in maintaining the PW4084 engine which enters revenue service in June.

The engine also simulated three ETOPS diversions. It ran at maximum continuous thrust for three hours, as if it was powering an aircraft that has lost one engine in flight.

The PW4084 hit every possible throttle setting a pilot could use during regular operations. In addition, every 75th cycle, the engine did a series of throttle settings purposely designed to cause unusual vibration modes.

The engine has accumulated over 9,000 hours of operation and nearly 20,000 cycles in both ground and flight testing. The PW4084 is a derivative of the PW4000 which went into service in 1987. By the time the PW4084 goes into service, the full PW4000 family will have flown 15 million hours with some 60 airlines around the world.

CANAC/MICROTEL'S SI EXPERTISE ON DISPLAY IN MALAYSIA

The Wednesday Report - Copyright 1995

February 1, 1995

Page

Coquitlam, British Columbia-based Systems Integrator CANAC/Microtel has begun work on its $46.2 million Vessel Traffic Management (VTM) contract in Malaysia.

The three-year contract was awarded to subsidiary SCM, a company formed between CANAC/Microtel and its Malaysian partner Sumber Peralatan & Perhubungan Sdn. Bhd.

The state-of-the-art solution is specifically designed to facilitate safe vessel traffic movement in the Straits of Malacca. The system will provide the Malaysian government with the capability to detect, track and control vessels in the Straits and will provide Malaysia with significant commercial and industrial benefits as it becomes better equipped to manage its busy waterways.

The VTM contract will see CANAC/Microtel design, supply, deliver, install, integrate, test and commission a vessel traffic management system for the straits of Malacca. The system will consist of a number of remote radar sites connected to control centres by means of a digital communication network — a highly reliable system using innovative technology, including radar and display systems from Raytheon Corporation of Malborough, Maryland to meet the demanding requirements for one of the world's busiest waterways.

Steve Soos, CANAC/Microtel Managing Director told The Wednesday Report he believes that, "...this contract [apparently the largest vessel traffic system contract to be awarded in the last ten years] is further proof of CANAC/Microtel's expertise and ability to provide systems of any size at some of the worlds highest levels and is a success story of cooperation between Malaysian and Canadian business and industry."

Contributing to CANAC/Microtel's winning the VTM contract was its systems integration approach. Explaining this, recently appointed business development manager Phil Cartwright said, "We gained customer knowledge and confidence by performing initial consulting services wherein we prepared studies for the Malaysian coastal Sea Surveillance Systems (SSS)."

As a dynamic and effective multi-disciplined team of systems integrators, CANAC/Microtel has the proven expertise to provide project management, design, engineering, installation, testing, training, and maintenance for complete turnkey communication, information, and surveillance systems.

Cartwright added that, "...in an ever-changing world of high technology, there is a growing need for a systems integrator to bring together the resources of many suppliers to provide the best possible solution to customers."

Formed in 1985, CANAC/Microtel is a partnership of CANAC International, the consulting and technology transfer division of Canadian National Railway, and Microtel International, a subsidiary of BC Telecom Inc. The company operates in the global marketplace in both the public and private sectors offering consulting, systems integration and systems support services. The firm's systems experience includes communication networks, military communications, life cycle support systems, mobile communications systems, security systems, and expressway management systems.

PEOPLE: SGT. HOPPE AWARDED MSC AND MB

His excellency, the Right Honourable Ramon Hnatyshyn has announced that a member of the Lord Strathcona's Horse (Royal Canadians) has been awarded two decorations, the Meritorious Service Cross (Military Division) and the Medal of Bravery for his actions in Bosnia during the summer of 1994.

In July, Sergeant Thomas Joachim Hoppe was in command of an observation post between Serb and Muslim forces. On several occasions the OP came under direct, aimed, small arms and anti-tank fire. In one instance Sgt. Hoppe returned fire and on others was forced to move his vehicles and men to safety, but throughout he remained calm, controlled and displayed outstanding leadership, for which he has been awarded the MSC.

On August 30, 1994, he rescued three children under fire near Visoko, Bosnia. Having noticed the children sheltering behind the gates in a cemetery he called for his driver to move an armoured personnel carrier to the area while he ran alongside. Then he broke cover and under intense fire hurried the children into the rear door of the vehicle. For this display of courage and professionalism he has been awarded the MB.

CALENDAR

February 15 — The winter meeting of the Industrial Benefits Association of Canada will be held at the Ottawa Congress Centre, 55 Colonel By Drive, Ottawa, Ontario. Contact Bob Brown at 1538 Featherstone Drive, Ottawa, K1H-6P2, telephone: 613-733-0704 or telefax: 813-945-3367.

Page

The Wednesday Report - Copyright 1995

February 1, 1995