BAe merger signals end of Jetstream 61

British Aerospace, which yesterday confirmed the merger of its regional aircraft operations with the Franco-Italian group ATR, said the alliance would be broadened to include other manufacturers.

Under the ATR agreement, BAe will end production of its loss-making Jetstream 61 aircraft, forcing the company to make a £250m provision to cover restructuring and the loss of about 1,000 jobs.

The deal covers BAe's Avro and Jetstream aircraft operations, and initially involves the merger of marketing, sales and customer services in a joint venture in which the partners will have equal shares.

ATR, which is made up of France's Aerospatiale and Italy's Alenia, and BAe's Avro and Jetstream businesses will retain individual responsibility for finances and industrial development.

However, the partnership - dubbed "Minibus'' after the Airbus venture - will study how best to achieve greater industrial integration and development of new products.

BAe said the partnership was just the start, as it was talking to other companies about joining, including Indonesia Aerospace, Saab-Scania and the state-owned Spanish group Casa.

Andy Wrathall, BAe spokesman, said: "This will affect the whole European regional aircraft industry and beyond. It is not meant to be a static venture - it is designed to be added to, and we welcome continued dialogue with manufacturers."

Daimler-Benz Aerospace, whose Fokker division held merger talks with BAe and which stands to lose most from the ATR agreement, said the deal offered no solution to problems in the industry. A spokesman said: "Today's agreement is based on marketing and not a reduction of industrial capacity, because there is hardly any overlap between their products.

"We want to go further and reach an industrial alliance. A purely European solution will not be enough to ensure a lasting future for the industry in Europe."

Dick Evans, BAe chief executive, said: "This deal is a great day for the European aerospace industry. Although the regional aircraft market remains very difficult, we will be able collectively to strengthen our performance and to drive down costs."

Analysts welcomed the agreement. BAe's shares put on 1p to 473p after rising strongly in advance of the deal.

Jetstream 61 duplicates ATR's own aircraft in the 64- and 72-seater range. It is produced at a plant at Prestwick in Scotland, where 2,000 staff work. The successful 30-seat Jetstream 41 aircraft is also made there.

Mike Turner, head of BAe's commercial aircraft division, said the company expected gradually to reduce its sales, marketing and support workforce of some 850 in the regional aircraft business by about 400. At Chadderton, near Manchester, about 550 jobs will go from the current workforce of 2,400.

Mr Turner said that the ATR venture would involve a combined sales, marketing and support staff of about 900, of whom BAe would supply about half.

The venture's headquarters will be located in Toulouse, where Aerospatiale is based.

BAe accompanied the news with a profit forecast for 1994 of £185m, against £71m last time, excluding exceptionals. The final dividend would be not less than 6p, up from 5p last year, making a forecast total dividend of not less than 10p (8.3p). The provisions will be taken as a £215m exceptional item in the 1994 accounts, and £35m in those for 1995.

Voices
On the last day of campaigning before the polling booths open, the SNP leader has written to voters in a final attempt to convince them to vote for independence
voicesIs a huge gamble on oil keeping the First Minister up at night?
Life and Style
techApple has just launched its latest mobile operating software – so what should you do first?
Arts and Entertainment
tv

Arts and Entertainment
Rosalind Buckland, the inspiration for Cider with Rosie died this week
booksBut what is it like to be the person who inspires a classic work of art?
PROMOTED VIDEO
Arts and Entertainment
The former Doctor Who actor is to play a vicar is search of a wife
film

Matt Smith is set to join cast of Jane Austen classic - with a twist

News
A male driver reverses his Vauxhall Astra from a tow truck
newsThe 'extremely dangerous' attempt to avoid being impounded has been heavily criticised
Arts and Entertainment
Lionel Messi in action for Barcelona
filmWhat makes the little man tick?
Arts and Entertainment
tvReview: An undercooked end (spoiler alert)
News
i100
News
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
Pharrell dismissed the controversy surrounding
musicThe singer said 'the last thing I want to do is degrade'
Sport
Cesc Fabregas celebrates his first Chelsea goal
footballChelsea vs Schalke match report
Arts and Entertainment
Toby Jones (left) and Mackenzie Crook in BBC4’s new comedy The Detectorists
tvMackenzie Crook's 'Detectorists' makes hobby look 'dysfunctional'
Life and Style
fashion

Olympic diver has made his modelling debut for Adidas

News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Property Underwriter

£70-90,000: Saxton Leigh: Our client a London Market Insurer are seeking a Pro...

Operational Risk Manager - Asset Management

£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...

Trainee Recruitment Consultant Birmingham

£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...

Trainee Recruitment Consultant - Birmingham - Real Staffing

£18000 - £23000 per annum + Commission: SThree: Real Staffing are currently lo...

Day In a Page

Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam
'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

'She was a singer, a superstar, an addict, but to me, her mother, she is simply Amy'

Exclusive extract from Janis Winehouse's poignant new memoir
Is this the role to win Cumberbatch an Oscar?

Is this the role to win Cumberbatch an Oscar?

The Imitation Game, film review
England and Roy Hodgson take a joint step towards redemption in Basel

England and Hodgson take a joint step towards redemption

Welbeck double puts England on the road to Euro 2016
Relatives fight over Vivian Maier’s rare photos

Relatives fight over Vivian Maier’s rare photos

Pictures removed from public view as courts decide ownership
‘Fashion has to be fun. It’s a big business, not a cure for cancer’

‘Fashion has to be fun. It’s a big business, not a cure for cancer’

Donatella Versace at New York Fashion Week