Flight International Online news 10:00GMT: UK-based BAE Systems is warning that its regional aircraft division is expecting an increased loss this year, following a review prompted by the bankruptcy of several its US operators.
The company states that the losses will drag down its commercial aerospace results despite an improved contribution from its Airbus activity.
BAE Systems’ links in the USA notably include Northwest Airlines and its feeder Mesaba Aviation, which operates some 35 BAE Systems Avro regional jets.
The feeder operator also has a Cincinnati-based maintenance facility operated in co-operation with BAE.
In October Mesaba warned it could lose its entire Avro fleet as part of Northwest’s own restructuring programme. Northwest filed for Chapter 11 bankruptcy protection in September, a move that resulted in Mesaba’s own bankruptcy a month later.
A spokesman for BAE Systems says that the situation at Northwest and Mesaba will affect the spares and support operation to the regional aircraft.
In a profit warning issued today BAE says: “With a number of US airlines currently operating under Chapter 11 protection, BAE Systems has reviewed the outlook for its regional aircraft business.
“An increased loss is now expected in that business and the performance of BAE Systems’ commercial aerospace sector in 2005 is now expected to be below that for 2004 despite an improved contribution from Airbus.”
Airbus is forecasting delivery of 370 aircraft this year compared with 320 in 2004.
Other major BAE Systems regional aircraft operators in the USA include Air Wisconsin and Trans States Airlines.
DAVID KAMINSKI-MORROW / LONDON
Source: Flight International
