26 Apr 2002
BAE Systems Regional Aircraft today announced the measures it is taking to re-launch itself as a service business following the cancellation of the Avro RJX programme and the cessation of regional aircraft manufacturing by the company.
The new business will be focused on three business strands - Customer Support, Engineering and Asset Management.
The key measures being taken to create a sustainable business for the long term are:
- A new management team led by newly appointed Managing Director Alan Fraser to take the business forward;
- A two-year 20 million investment programme for IT systems and facilities;
- A rationalisation of sites and facilities with the centre of engineering and support to be progressively located at Prestwick, Scotland through to the end of 2002;
- 1150 employees by mid-2003 with a strong service culture.
The new business builds upon a strong base with over 1100 aircraft in service worldwide, over 160 customers and a turnover (excluding residual manufacturing) of 170 million a year. Its aircraft are strongly represented in many key markets such as Europe where they are the most numerous among airlines belonging to the European Regions Airline Association.
The business is an acknowledged pioneer and leader in asset management with a trading portfolio of some 450 aircraft. It is the world's largest regional aircraft lessor by fleet size and second by value. BAE Systems Regional Aircraft also has world class spares and customer training facilities and retains a complete capability in engineering and design.
Alan Fraser commented: "We are building on what is acknowledged to be a support business with a reasonable reputation in the market. There have been tremendous strides in our support business over the past 10 years, but we now plan to do more. The removal of manufacturing from the equation gives us a great opportunity and means that we can concentrate totally on building up a service business.
"Service businesses are characterised by a different way of working. They have efficient processes and rapid decision making. This is what we are determined to achieve. We are planning on new ideas, new service products and new methods focused on meeting the demanding needs of our customers," he added.
The intention is for the new Regional Aircraft business to return to profitability, to maintain its customer base and revenues and to lower costs. The main business sites will be Prestwick (Engineering and Customer Support), Hatfield (Asset Management) and Weybridge (Spares). Smaller facilities will be retained at Washington DC (Support and Asset Management), Sydney (Spares) and Woodford (Customer Training and Engineering).
Each of the three business strands has clear objectives for long term success. The Asset Management business will ensure that the leased fleet stays in service and will also be developing new markets and associated service products. Freighter applications of the ATP and possibly also of the BAe146 are being offered to the market. New revenue will be generated from broadening the trading and services activities into different aircraft types and further expansion as a portfolio servicer business.
The Customer Support business will concentrate on improving its customer services products and is already benefiting from increased investment in systems, facilities and new spares stocks. After the rationalisation has been completed, there are plans to grow the business through developing relationships with other service companies. Already the business manages European spares supply for Raytheon and Embraer and this type of service capability can be further exploited.
A strategy for customer training is being developed with centres at Prestwick and Woodford being retained.
The Engineering business will retain its total aircraft capability to support the in-service fleet and product integrity. The growing engineering expertise will be used to develop specific variants of existing products such as the ATP freighter and a possible BAe 146 freighter variant. In addition, building on the considerable expertise gained from the Nimrod MRA4 programme, the engineering skills will be employed to win a variety of other third party work. The engineering team has already won third party work from other aircraft manufacturers and marketing of this capability will be stepped up.
"The breadth of service and depth of engineering capabilities that Regional Aircraft can offer are key differentiators of our new business offering as we are truly comparable to the world's major manufacturers in this respect", said Alan Fraser. "We will package these services together to offer customers a better approach to running their businesses. Our total service concept should be a better proposition for them to consider and we are eager to explore this with them."
