BAE Systems announced today a range of new contract wins across its Regional Aircraft Support and Engineering businesses and outlined new initiatives for improved support offerings.
“Our business continues to deliver on its financial targets and is cash generative”, said Managing Director, Alan Fraser. “These new contracts and further initiatives to help our operators, underline our strong value proposition which we offer. Our market-responsive support strategies are now appealing increasingly to both well-established and new operators of our aircraft on a world-wide basis. We have re-shaped our engineering business and geared it for growth. The skills, expertise and total aircraft design capability of our team are recognised by leading manufacturers worldwide as being of substantial benefit to them, resulting in a steady flow of new business.”
Two new and substantial multi-million pound rate-per-flying-hour spares support contracts were announced today. Swiss International Airlines has signed a five-year JetSpares contract covering its fleet of 20 Avro RJ100 regional jetliners, while leading European cargo airline, West Atlantic has concluded a three-year MACRO deal for all 44 ATP turboprops in its fleet.
JetSpares and MACRO are rate-per-flying-hour programmes covering the BAe 146/Avro RJ and the turboprop fleet respectively. Both programmes are designed to allow airlines to concentrate on their flight operations while BAE Systems Regional Aircraft takes care of spares inventory, logistics and repairs. The priority is to keep the airline’s business running smoothly by providing a first-class support service.
Its engineering business has also benefitted from a new growth strategy, and building upon its success with Mitsubishi Aircraft Corporation of Japan, it has secured further design engineering work from four additional new Original Equipment Manufacturer (OEM) customers. Over the past two years this new strategy has meant that the proportion of third-party engineering revenues from outside BAE Systems has grown from 35 per cent in 2010 to an estimated 92 percent this year.
BAE Systems has also won spares support business from three new BAe 146/Avro RJ operators – Eznis Airways of Mongolia, North Cariboo Air of Canada and Dragon Air Management of South Africa – for its new ‘Parts Plus’ spares delivery service that is designed to appeal, initially, to new operators of the aircraft. Under ‘Parts Plus’ BAE Systems will offer fixed pricing until the end of 2013 with an availability guarantee on a steadily increasing range of spare parts.
Building on its regionalised support strategy that has been developed to support the growing use of its aircraft in further-afield territories, the company also announced that it has reached agreement with leading global logistics company Kuehne+ Nagel (K+N) to place a quantity of BAe 146/Avro RJ consumable and rotable spares into K&N’s existing Miami warehouse facility to better serve existing and new operators of these aircraft in the Latin American market. This warehouse will also be used to service the North American market where a number of new operators of the BAe 146/Avro RJ are emerging.
Locating spares close to operators has also led to the decision by BAE Systems to place an extra consignment stock of spares for the Avro RJ close to London City Airport this summer for the duration of the Olympic Games. To be housed in a CityJet storage facility, the extra spares will be available to all Avro RJ operators serving the airport during the busy Olympic period and so help maintain a reliable service schedule.
The company also revealed a new support initiative that will benefit its Jetstream turboprop operators. It has reached agreement with Propulsion International of California for the joint marketing and sales of a Honeywell TPE331 engine rate-per-flying hour support programme for the Jetstream family of aircraft.
BAE Systems also announced a new agreement to extend its support solutions for the BAe 146/Avro RJ with Meggitt Aircraft Braking Systems of Coventry, UK under which it will now offer wheels and brakes maintenance support for new operators of the BAe 146/Avro RJ.
Building upon its established two agreements for engineering design, development and certification support to Mitsubishi Aircraft Corporation for the Mitsubishi Regional Jet (MRJ) programme, BAE Systems also announced a new contract from Mitsubishi to manufacture, test and supply flight test equipment for the MRJ. This third contract from the Japanese company takes advantage of BAE Systems’ managed solutions offering which combines both its engineering and supply chain skills.
Another new contract win that combines design, planning, technical support, supply chain and project management skills has been won from South African carrier, SA Airlink, for the major repair of an Avro RJ85 that was involved in a nose landing gear incident in early November 2011. The contract also builds upon the company’s reputation for excellence with its aircraft repair services.
Source: BAE Systems PLC (LSE: BAES.L)
Date: Feb 12, 2012