Kevin O'Toole/LONDON

British Aerospace has effectively ruled out making any major investment in the Aero International Regional (AI(R)) Air Jet regional-jet programme, saying that the most important priority for funding must be the Airbus Industrie consortium.

The company has pledged publicly to continue to support AI(R)in getting the programme off the ground, including the search for other project partners, but the company stresses privately that it has no intention of becoming a risk-sharing partner, beyond minor aerostructures work.

"In the context of the need to develop Airbus, that has to be the priority," says Sir Richard Evans, BAe chief executive.

BAe is now in discussions with the UK Government about the possibility of obtaining launch aid to support its share of the development in the $2.5 billion Airbus A340-600 project.

Senior sources within BAe also question the enthusiasm from the French and Italian AI(R) partners, Aerospatiale and Finmeccanica, to underwrite a major share of the $1.2 billion needed to launch the 70-seat Air Jet.

Doubts over BAe's commitment have overshadowed the Air Jet programme ever since it was proposed in 1996. AI(R) has been attempting to put some greater urgency behind the stalled programme, warning that the consortium will fall behind in the race to compete with Bombardier's 70-seat regional jet (Flight International, 10-16 September).

The warnings are dismissed by Mike Turner, chairman of BAe Commercial Aerospace, which is still extracting itself from the massive losses racked up on its own regional-aircraft programmes. "The last thing that we want to do is act fast. We've been badly burnt in the past," he says.

The latest comments come as BAe revealed healthy half-year profits, having put in place the final pieces of its plan to stem the losses from the regional aircraft business. That included a provision of £250 million to cover closure of the loss-making Jetstream 41 line at Prestwick,Scotland. The Avro RJ business also reached its targeted break-even figure for the half year, and BAe adds that any future profits will be re-invested in supporting the existing business.

BAe will continue to contribute £60 million a year to the AI(R)consortium to cover fleet support, but otherwise expects the regional-aircraft sector to be neutral, leaving Airbus earnings to flow through in the commercial aerospace division. The business ended the first half with losses cut to £20 million, as turboprop losses offset Airbus profits.

Source: Flight International