British European, launch customer for the now defunct BAE Systems Avro RJX, has finally reached agreement with the manufacturer over terms for the cancellation of its order.

The Exeter, UK-based carrier has been in talks with BAE about the fate of its 12 firm orders and eight options since the announcement in late November that the Honeywell AS977-powered RJX programme was being terminated (Flight International 4-10 December 2001).

With British European initially declining to cancel its order, BAE faced the prospect of being contracturally obliged to build the RJXs.

British European has agreed terms to cancel its orders, saying that "it was reluctant to accept the risks associated with an orphan fleet, principally associated with the lack of fleet commonality, the cost for in-service support and the prospects for the eventual remarketing of the aircraft".

According to sources, a "commercial consideration" from BAE was a key part of the final settlement between the two sides. The airline operates 17 BAe 146s, and planned to use the new aircraft to replace the older version of the four-engined regional jet.

According to sources at the airline, although some discussions have been held with Embraer and Fairchild Dornier about their new regional jet programmes, there are no immediate plans to sign an order to fill the void left by the RJX.

Short-term, a "significant expansion" of the airline's Bombardier Q400 fleet from the current four-aircraft order is foreseen, with the high-speed turboprop likely to replace older 146s as their leases expire.

The other launch customer, Druk Air of Bhutan, had already agreed to cancel its order.

Source: Flight International