WITH THE ATR alliance under its belt, British Aerospace believes that it is close to stemming the losses from its regional-aircraft operations, which brought the UK group close to collapse two years ago.
The most immediate financial impact from the alliance will come from BAe's decision to close the Jetstream 61 line at Prestwick, in Scotland. The 70-seat turboprop, for which BAe has yet to find a buyer since it was revamped in 1994, caused losses of around £50 million a year. Production of the 19-seat J31 has already effectively ground to a halt, leaving Prestwick with only the J41.
BAe will also shed at least 400 jobs from the Avro and Jetstream marketing operations, following the setting up of the joint venture Company in Toulouse with ATR. The joint venture will employ 900 people, of which BAe will be entitled to nominate around half.
The group has put £285 million aside to cover the J61 closure and Jetstream redundancies. Avro job losses will be covered by existing provisions says BAe Commercial Aerospace chairman, Mike Turner.
He forecasts that Avro is now on target for break-even by 1997, with Jetstream following "some time beyond that". The improvement in civil-aircraft losses has already boosted BAe's financial performance, with the group revealing that its pre-tax profits are expected to come in at £185 million for 1994, against £71 million a year ago.
ATR reports that it kept operating profits at the Fr40 million ($7 million) mark in 1994 on a turnover of Fr3.8 billion.
Source: Flight International
