Saab is to discontinue manufacture of the Saab 340 and 2000 turboprops by mid-1999, shifting the focus of its civil-aircraft operation to support and finance of existing fleets, and to contracting for other manufacturers. The Swedish company is continuing discussions about the possible move of the production line to an Asian country.
According to Saab, the regional- aircraft business has lost the company SKr3 billion ($386.4 million) in the past three years alone. The move ends over 50 years of civil-aircraft building which started in 1944 with the Saab 90 Scandia twin-engined airliner.
The company has a backlog of 27 Saab 340s and 15 Saab 2000s, including recent top-up orders from Crossair for six Saab 2000s and two options, and from Mesaba for 19 Saab340B Plus. Holders of options have until the end of January to firm up orders. The last aircraft, a Saab 340, will be rolled out in September 1999.
The decision continues a shake-out in Europe's regional-aircraft industry, which has seen Fokker go bankrupt and British Aerospace cease turboprop manufacture with its decision to quit Jetstream 41 production.
Saab says that it sees a "strong future" for the types in the used aircraft market: 427 Saab 340s have been delivered to date, as well as 45 2000s. The company is stepping up support, and retains responsibility for 300 aircraft in its lease portfolio.
Saab remains interested in discussions on a future regional-jet programme, but says: "We have not yet found a project that matches what we think we need and what the industry needs." Saab says that it will seek subcontracting work for other manufacturers more vigorously, and says that it is pursuing other work packages from Airbus and Boeing. Talks are also in progress with China over moving the Saab 2000 line to Shanghai.
About 200-300 employees, of 1,800 in the regional-aircraft business, are expected to be laid off.
Saab is in talks with the Swedish Government about how to deal with the state's risk-sharing capital for the two programmes - about Skr 1.5 billion remains to be repaid.
A provision of SKr4 billion after tax will be made shortly to cover the cost of restructuring and to provide resources for servicing the existing fleet, and honouring leasing commitments.