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Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 4/98 AI(R) CONSORTIUM FACES ACID TEST by Heiko Reuter Celebrations at AI(R): at the end of January the consortium celebrated the handover of the 100th Avro regional jet (RJ) in British Aerospace's factory in Woodford. A festively decorated jubilee plane was waiting for its recipient, Northwest-Airlines-Feeder Mesaba from the States. However, the hosts did not feel like celebrating. There are dark clouds above the future of their association. The alliance (which was only formed two years ago) between British Aerospace (BAe) and the ATR firms Aérospatiale and Alenia, is about to be dissolved, because BAe has withdrawn its financial support amounting to one billion US dollars, for the development of a new 70seater jet. The partners feel snubbed. The project was supposed to develop further into a family of jets. Now the plans are off the table. Alenia is the only member that might not be too unhappy about the failure, since her coffers are empty. With the exit of the 70-seater AI(R) has practically no basis for business any longer. According to insiders British Aerospace is in favour of continuing logistics and customer support as a joint venture. However, the ATR-firms allegedly want a complete severance. At the end of March the partners will decide on the future of the association. Most experts predict a negative outcome. The causes. The British are getting out of the joint jet program, because they are putting their money on their own product. They are still offering the Avro RJ in three versions ranging from 70 to 112 seats. Its basic design goes back as far as the 70s. The AI(R)-jet family was targeting exactly this segment of the market. After high losses lasting over many years Avro managed to break even in 1997. Additionally Avro succeeded in gaining a potential partner in the Far East with the Malaysian State run company Kazanah. Malaysia wants to produce parts for Avro. This could mean further savings for the program. Rumour has it that Kazanah even wants to take over half of BAe's Avro arm. According to insiders BAe has still more up its sleeve. There are plans for the RJ to be incorporated within the Airbus program. However, Airbus is thinking about a jet of its own (below the A319) together with Chinese partners, but the "Asian Express" has so far not succeeded in going further than good intentions. Since Boeing's 100-seater 717 will be on the market by next year, Airbus has to act. The dumping price of the US plane is estimated at 18 million US dollars, which also endangers the RJ. With Airbus' backing its market chances will rise - a classic win-win situation. The roomy British jet is popular with passengers. There are, however, high running costs. The LF507 engines need a lot of fuel and maintenance work. The manufacturer, AlliedSignal, is working on a new version. According to information being made available to FLUG REVUE, old plans to have the aircraft reconfigured with two engines only are now being revived. BAe's 146-NRA from the beginning of the 90s and later as Avro's RJ-X conceived twin "could well be on the market in four years' time," said AI(R) marketing SVP Jeff Marsh, formerly of Avro. A twin-engined Avro RJ or a current version powered by new engines could round off the bottom of the Airbus product range. Marsh denies any intentions in this direction. However, he thinks that the integration option is "logical, in case Airbus does not make any progress with the Chinese". Airbus Industry will neither confirm nor deny talks about integrating Avro. An AI spokesperson, "No comment". From FLUG REVUE 4/98, page 27 Home | Update | LATEST ISSUE | Gallery | FR Profile | Datafiles | FR 4/98 Copyright 1998 by Motor-Presse Stuttgart. All rights reserved. Last updated March 6, 1998 FLUG REVUE, Ubierstr. 83, 53173 Bonn, Germany