Kevin O'Toole/LONDON

Mike O'Callaghan, brought in to head British Aerospace Regional Aircraft earlier this year, is looking at a major expansion of the unit's customer service and technical operations.

BAe Regional has sales of around £460 million ($766 million), but around 80% comes from the Avro RJ regional jet line, with the remainder in spares and support, including training, testing, maintenance and paintshop services. Spares and support are already being reorganised following the collapse of the Aero International (Regional) venture.

O'Callaghan believes that there is potential for the "complementary businesses "to grow strongly, possibly coming to represent half the business. He points to an installed base of some 1,200 BAe regional aircraft in service around the world, including the Avro, Jetstream and earlier families, for which the unit is design authority.

The drive for efficiency on the RJ production lines has left much of the site at Woodford, Manchester unoccupied, giving room to expand ancillary businesses such as maintenance. "A massive piece of the site is empty," says O'Callaghan. He adds that the RJ assembly is already down to only 11 weeks and the aim is to have taken it down to only eight during 1999.

The focus will be on BAe aircraft, but O'Callaghan does not rule out future co-operation with Saab Aircraft in which the UK group is taking a 35% stake. "It is very early days, but these things will evolve in time. There have to be synergies, but we have not researched them yet,"he says.

Source: Flight International