Supporting Fairchild Dornier
Moving to broaden its support portfolio beyond its original product line, BAE Systems Regional Aircraft has inked a six-year agreement with the Virginia-based Avcraft Aviation, covering the Dornier 328 and 328JET regional aircraft.
The deal is part of the company's medium-to-long-term strategy of pushing into the third-party platform market, expanding its business base beyond the BAE 146/Avro RJ regional jets, the ATP and Jetstream family of turboprop commuter aircraft.
The three-phase deal with Avcraft initially was to see deliveries of $150-million-worth of spares beginning last month. A second phase over the next six months will see orders placed with the BAE company via Avcraft, while the third phase will see BAE act directly with the aircraft operators.
Avcraft struck a deal with the Fairchild Dornier administrator in January 2003, covering the 328 family of aircraft. The company also acquired the rights to the Fairchild Dornier name (AW&ST Feb. 10, 2003, p. 18).
BAE Systems Regional Aircraft business has undergone a torrid time since it was set up in 2001, emerging as a result of its parent company's decision to withdraw from the regional and commuter aircraft business.
"We were in a bit of trouble, and some very serious actions had to be taken," admitted Alan Fraser, the managing director. However, he added, "the business has come through a very difficult period," with a restructuring program now complete, complemented by a strong performance during 2003.
"We've taken 20% out of the cost base in the last two years," said Fraser. Further reductions are being targeted, but these will be achieved through investment in "information technology and process redesign" rather than the more blunt instrument of workforce cuts.
While its existing product base, BAE's legacy commercial regional and commuter aircraft, potentially provides a revenue stream well beyond 2015, senior company management is keen to supplement, and eventually supplant these, with additional aircraft types.
BAE's regional aircraft operation will also see the rollout of the first two of its ATP freighter conversions being carried out by Romania's Romaero during the first and second quarters of 2004. The company has so far ordered a total of 10 conversion kits for the twin-turboprop aircraft.