BAe seeks pounds 160m aid for new plane

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The Independent Online
British Aerospace has approached the Government seeking up to pounds 160m in launch aid to develop a stretched version of the Airbus A340 long-range jet. Rolls-Royce is also negotiating an aid package to build an engine for the new aircraft based on its Trent engine.

This emerged yesterday as the aerospace industry launched a campaign to persuade the Government to increase research and development funding for the sector fivefold to pounds 100m a year.

Mike Turner, president of the Society of British Aerospace Companies and head of BAe's commercial aircraft business, said that together with launch aid the industry was looking for a total of pounds 250m a year in government support.

BAe also intends to seek pounds 250m in launch aid for the 600-seat super jumbo planned by Airbus, the A3XX. The R&D programmes the industry is seeking increased funding for include a new wing design for the A3XX, advanced cockpit technology and a project aimed at reducing aircraft maintenance costs.

The industry will press its case at a meeting in the next few weeks with Margaret Beckett, the President of the Board of Trade. Mrs Beckett will also attend the Paris Airshow next month, where ministers from the four Airbus nations - Britain, France, Germany and Spain - are expected to review progress towards turning the consortium into a commercial company and the request for further launch aid.

The A340-500/600 series will cost pounds 2bn-pounds 2.5bn to launch and will give Airbus a long-range 375 seat jet able to compete with Boeing's 747 jumbo and versions of the wide-bodied 777. Rolls is vying with the US engine manufacturer Pratt & Whitney to supply the engine for the new aircraft. A decision on which manufacturer has been chosen may be announced before Paris.

BAe received pounds 400m in 1987 to develop the A330-A340 family of jets. It is due to start repaying that launch aid this autumn through a levy on sales and is pressing the Government to agree the new support package at the same time. Launch aid repayments will bring in pounds 500m for the Government over the next five years.

Mr Turner said that if Britain did not increase its support for aerospace R&D then 40,000 of the 100,000 jobs the industry supports could disappear over the next 15 years as companies went overseas for funding.