Company of the week: British Aerospace

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The Independent Online
BRITISH Aerospace, one of four companies in Airbus Industrie, said it has asked the Government for a pounds 500m loan to help fund its role in developing a new superjumbo that would break Boeing's monopoly on planes seating more than 400.

The company, which designs and builds wings for all the Airbus planes, owns a 20 per cent stake in the group. Its request does not mean BAe is committed to the business case for building the new plane.

While Airbus has been working on plans for the superjumbo for several years, it won't make a final decision on whether to offer the plane formally to airlines until late this year. Airbus has said it doesn't believe the plane is worth making unless it can achieve operating costs 15 per cent lower than those of the 747-400, Boeing's largest plane, which can seat up to 500 passengers.

Howard Berry, a spokesman for British Aerospace Airbus, said the company expects the UK government to make a decision on the loan before November, when there is a supervisory board meeting of Airbus which could decide whether to begin offering the plane to airlines.

"The programme will be launched when the market appears ripe for the project," said Mr Berry. "When we are commercially and technically ready."

The Department of Trade and Industry said it couldn't comment on the timing of a decision or on whether all or part of the loan might be approved.

BAe chief executive John Weston has said that the company will only vote to proceed with the new plane if it feels it can present to its shareholders a strong business case for the project, expected to cost $12bn (pounds 7.5bn).

Boeing and Airbus have different views about the demand for a plane seating so many passengers. Airbus envisages the A3XX, as it now calls the plane, carrying 600 initially and as many as 800 people in later versions.