BAE SYSTEMS gets out of regional jet business

IL Serge Pod #28.11.2001 06:53

Serge Pod


BAE SYSTEMS gets out of regional jet business

27 November 2001

Blaming the aftermath of the 11 September terror attacks on the World trade Centre and the Pentagon, BAE SYSTEMS has decided to pull out of the regional jet business altogether. The company is closing its Avro RJX programme immediately and closing the Avro RJ production line when the four aircraft in production are completed.

The decision will mean 1700 job losses and BAESYSTEMS will take a Ј250 million charge in 2001. The job losses announced today relate only to BAE SYSTEMS' wholly owned businesses and exclude any impacts of 11 September falling within the Airbus integrated company.

Announcing these decisions today John Weston, Chief Executive, BAE SYSTEMS, said, "...operating profit expectations for Airbus next year have been reduced significantly and the outlook for regional aircraft has deteriorated sharply. Regrettably it has been concluded that our regional jet business is no longer viable in this environment."

He said the decision drew "...a line under the company's exposure to regional aircraft manufacturing and secures the company's financial exposure in this market."

The Company also said that Airbus production in 2002 would be reduced to 300 aircraft, although the company expected Airbus to remain profitable at the revised level of output.

BAE SYSTEMS said that by comparison to the commercial aerospace business, the core defence businesses were performing well, citing the recent announcement of further work in the UK's aircraft carrier project and the award of the JSF contract to the Lockheed martin team, in which the company has a 15% stake.

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