BAE Systems said today it will close its regional jet programme and cut about 1,700 jobs because of slumping civil aerospace sales after the September 11th attacks.
BAE, Britain’s largest defence group, said civil operations had suffered after the hijack attacks in New York and Washington that caused airlines to cut capacity as travellers avoided air travel.
BAE said the closure of its RJ and RJX regional jet programmes would lead to an exceptional charge of £250 million sterling in 2001. BAE also announced restructuring costs of £150 million for its other commercial aerospace businesses.
But the firm said its core defence business, accounting for over 70 per cent of revenues, was progressing well.
BAE shares initially fell but then recovered to deal up 0.3 per cent to 326p in early trading. The stock had lost 4.4 per cent yesterday as rumours spread BAE was set to issue a gloomy trading update.
BAE, which employs over 100,000 worldwide, has cut 3,700 staff so far this year, including those announced today. Some were announced in January, when the company issued a profits warning because of falling orders in its military programme.