BAE executives killed in US terror attacks

BAE Systems cut its forecast yesterday for deliveries of Airbus aircraft in the wake of the suicide plane attacks on America which, it has emerged, claimed the lives of three senior BAE executives.

Despite the civil slowdown, BAE shares climbed 12 per cent on optimism about its defence prospects and expectations that the company will grow earnings this year when it warned in January of a flat 12 months.

The company said it now expected Airbus production to reach no more than 350 to 370 next year, compared with 330 this year. Last month, Airbus said it expected production to reach 400 – a reduction on the 450 deliveries the European manufacturer had been forecasting earlier in the year.

John Weston, BAE's chief executive, said, that the throttling back in production was unlikely to have much impact on jobs since BAE was in the process of taking on an extra 8,000 workers for the A380 super jumbo programme. "It is easier to take your foot of the accelerator when you are going faster than to slam your foot on the brake harder when you are slowing down," he added.

The three BAE executives killed in Tuesday's atrocities were all US citizens. Bob Penniger, a programme director at BAE's mission solutions division in San Diego was aboard the American Airlines flight which crashed into the Pentagon. Charles Jones, a programme manager with the electronic warfare systems business in New Hampshire was a passenger on the American Airlines flight which hit the World Trade Centre. A third unnamed BAE executive was inside the Pentagon when the military base was attacked.

Analysts said the group's defence arm will benefit from an increase in military spending, especially in the US where there is growing expectation that the $100bn (£68.3m) Joint Strike Fighter programme will get the go-ahead next month.

BAE reported a 4 per cent rise in pre-tax profits for the first half of the year to £482m and forecast stronger trading in the second six months.