British Aerospace Flying High

The vicissitudes of the British aircraft industry since the end of World War 2 have been really quite remarkable. In 1945 there were 27 airframe design companies and eight aircraft engine companies comprising the major part of the British aircraft industry. Within a few years it became obvious that a reduction in the number of these companies would have to come about through rationalisation. The enormous cost of projects, both civil and military, was plainly beyond the capacity of the smaller organisations. What was aimed for by the planners was an industry with an overall labour force of 150,000.

The Korean War intervened and by 1955 the British aviation industry involved 250,000 people, way over early estimates. Aircraft production which was approximately 2000 aircraft per year during the years 1953 to 1955 though fell to 510 aircraft in 1960. Clearly, a streamlining was urgently required. These pressures led in part to the formation of the British Aircraft Corporation in 1960 which was born out of an amalgamation of Bristol, English Electric, Hunting Percival and Vickers Armstrong. Hawker Siddeley formed the other group and eventually absorbed Armstrong Whitworth, Avro, Blackburn, de Havilland, Folland, Gloster and Hawker.

These two major companies together with Rolls Royce (which was to become the sole British aircraft engine manufacturer) constituted the major components of the British aviation industry. A final important step took place with the creation of British Aerospace in April 1977, the nationalised marriage of the British Aircraft Corporation, Hawker Siddeley Aviation, Hawker Siddeley Dynamics and Scottish Aviation. Of the 35 airframe and engine companies in existence in 1945 only Shorts, Westland and Rolls Royce were outside the British Aerospace group. With British Aerospace as the major repository of so much of the talent, expertise and tradition of the British aviation industry stretching back over many decades, Britain now had a more efficient force with which to compete with her aeronautical contemporaries.

In January 1981, the British Government changed the structure of British Aerospace from a Corporation in public ownership to a Public Limited Company in the private sector. The following month the Government offered for sale approximately half the issued share capital of the company. As a result ownership of British Aerospace became: the Government 48. 43%, shareholders 48. 43% and employees 3. 14%. The Government offered its shareholding for sale in May 1985 while at the same time the Company also offered for sale £25m of new ordinary share capital for its longer-term requirements. This brought the total number of shares on issue to 250,000,000 50p shares. The public issue of shares was extremely popular and was heavily oversubscribed. Overseas ownership of the shares is limited to 15%. As at 31 December 1985, there were 136,513 shareholders and the market capitalisation as at January 1986 was £1082m.

Apart from being a very large company in terms of the number of employees, British Aerospace with its 76,000 labour force is of vital importance to the British economy. With 76,000 employees BAe is larger than Ford UK with 61,000 but not as big as British Leyland with 101,000 or GEC with 178,000. It is interesting to observe that Rolls Royce has a total UK workforce of 40,000 of which 35,740 is engaged in the aerospace gas turbine field. When one adds up the workforce totals of British Aerospace, Rolls Royce and the smaller UK aviation companies, the overall total would be less than the industry predictions of 150,000 put forward 40 years ago. Those rationalist proponents of four decades ago would undoubtedly be pleased with the current situation.

The British Aerospace workforce meanwhile is involved with a high technology, high value product that not only has a vast multiplier effect for other British industries but also holds the important rank of Britain’s number one manufacturing exporter. Of total sales of £2648m in 1985, exports accounted for 61% of this amount. Net profit after tax was $127m compared with £108m in 1984. Launching costs written off during the year amounted to £51. 6m and included expenditure on the BAe 146 £27. 3m, Airbus £6. 9m, BAe 125-800 £1. 5m and ATP £15. 9m.

So what effect, if any, has privatisation made to British Aerospace? Australian Aviation visited many of the BAe aircraft manufacturing facilities last year and was able to see a wide variety of current production programmes and future projects. These ranged from Hatfield with the BAe 146, Chester with BAe 125, Woodford with BAe 748, Nimrod AEW and ATP, Warton the military jewel in the crown with the Tornado line and the EAP prototype which was in a very advanced state, Kingston the site of Harrier and Hawk, Prestwick with Jetstream 31 and Filton, with its huge Brabazon hangar which is the largest in Europe, is now the BAe Airbus Project Centre. Apart from these aircraft production lines many other important programmes are under way. Airbus wing production is shared amongst various factories as is the manufacture of components for BAe aircraft. Substantial maintenance contracts are also held for both civil and military aircraft for UK and overseas customers.

After discussions with numerous senior British Aerospace officials, Australian Aviation gained the impression that privatisation has further heightened the commercial awareness already evident in British Aerospace since its formation. Quite often British industry has been labelled as archaic and out of step. Any such accusations certainly do not apply to British Aerospace. For a long time, the British aviation industry has realised the need to produce sound commercially viable products for a global marketplace. The British Aerospace officials I spoke to have a sound respect for their competitors. However, they also believe that British Aerospace can do better in many fields and they are setting out to do so accordingly.

British Aerospace has made a substantial contribution to the Airbus programme. It has been responsible for the design and manufacture of wings for the A300, A310 and the new A320. The company has invested over £250m to date in various aspects of the A300 and A310 projects and in the A320 programme the British Government is providing £250m of repayable aid phased over the early years of the project. In terms of workshare, BAe has a participation of 20% in the A300 and A310 and this has been increased to 25% in the A320. The rapid success of the A320 with 99 sales and 164 options as at the end of 1985 ensures a long line of work for this attractive new airliner. Apart from the aircraft side of their activities, BAe supplies a wide and varied range of weapons and is one of the largest guided missile design and manufacturing organisations in the West. This division employs more than 20,000 people and is currently involved in the development, production or support of more than 20 weapon projects. BAe also manufactures a myriad of other products including propellers, flight data recorders, infrared surveillance equipment and marine navigation systems – these are just a few of the wide variety of hardware to come from their factories. The space research and engineering side is also very active and BAe is the prime contractor for all communications satellites currently being built for the European Space Agency (ESA). BAe was the prime contractor for the Giotto Scientific Spacecraft which was built for the ESA and has achieved such outstanding success with its rendezvous and inspection of Halley’s Comet. The list of all BAe products which includes scores not mentioned here is impressive and is virtually without parallel when compared with any other aerospace group. In Australia, British Aerospace has been enjoying a steady rate of success. On the civil side the BAe 125 has been a consistent seller and the Jetstream 31 has been popular. The recent sale to TAA was won against very stiff competition. Ansett’s BAe 146s are proving to be very popular with passengers and have gone smoothly into service. This aircraft would seem to be assured of further sales in the future. It is so demonstrably quieter than most other aircraft, including those that are currently permitted to operate during the curfew hours out of Sydney Airport, that it seems only a matter of time before it will be granted approval to operate around the clock from Sydney. An airline equipped with the projected 146 Combi with its various configurations of load varying from all passenger, mixed passenger/cargo or all cargo would be a very useful around-the-clock aircraft. In terms of value however, British Aerospace’s 25% of the work associated with the sale of $1000m of Airbus A320s in Australia is its most significant involvement financially to date in our region. The Adva1_1ced Turboprop Airliner (ATP) would seem to also offer much to Australian operators. When Australian Aviation recently visited Woodford, we were able to inspect both the prototype and full-scale mock-up. This 64-seat airliner will be powered by two Pratt and Whitney PW124 engines each of 2520hp. The new generation PW124 is highly fuel efficient and features modular construction for ease of maintenance. British Aerospace in association with the Hamilton Standard Division of United Technologies has designed and manufactured new generation 13′ 19″ diameter six-bladed propellers. The combination of low tip speeds, six blades and wide propeller-tip-to fuselage clearance will result in jet standards of noise and vibration internally and a noise footprint of 90dB, one-fifth the area of a twinjet. A break-even point of 22-26 passengers and fuel burn of 195USgal per block hour are other attributes. An aircraft of this operational flexibility would seem tailor-made for Australian regional conditions.

On the military side, British Aerospace’s chances of selling the Harrier in Australia, which at one stage seemed quite promising, have been reduced to virtually nil since the abandonment of the plan to replace HMAS Melbourne with another carrier. A better prospect from the BAe viewpoint is the potential for Hawk with the RAAF. The proposition advanced is that following the introduction into service of the F-18, the level of pre-OCU training be raised to minimise the very expensive flying hours on the operational type. The BAe Hawk Mk60 could carry out realistic air to,air and air-to-ground combat training and the Mk100 Series with its advanced avionics would further extend the training potential by introducing systems management training on equipment the same as, or similar to, those specified on the F-18. One case put forward is that 20 Hawks operated by the RAAF over 20 years at 300 flying hours per aircraft per year would enable three Hawks to be operated in the training role for the cost of one Hornet. A collaborative programme could be implemented to produce the Hawk in Australia, if say a mix of Hawk Mk60 to be followed then by Hawks Mk100 and Mk200 were to be acquired by the RAAF for various roles. It is assumed that there will eventually be a need for a new advanced trainer aircraft and tactical weapons and air combat manoeuvring trainer aircraft to reduce the training hours required in the F-18 force and that an armed reconnaissance and close air support aircraft will be needed to support the army. This latter scenario is more ambitious but makes a lot of sense. However, the present cost of the F-18 programme would seem to make acceptance of such a scheme unlikely in the short term. In the medium term the Hawk might have a better chance after a greater proportion of the Hornet’s costs have been met by the defence budget. The considerable success of the Hawk T-45 version chosen by the USN for its Strike Training System further emphasises its suitability for a similar role with the RAAF.

On a global scale, British Aerospace is well poised to face the marketplace with justifiable optimism. It has an impressive array of products which have been well accepted by customers, both civil and military, around the world. The outstanding order book at the end of 1985 was £5138m compared with £4820m at the end of 1984. This year is an important one for British Aerospace in terms of new aircraft as three aircraft will have their maiden flights, namely the ATP airliner, the Hawk 200 single seater and the Experimental Aircraft Programme (EAP) fighter aircraft. There is no doubt that these aircraft will further enhance the product line of British Aerospace. From an historical viewpoint, British Aerospace is the ultimate, standard bearer for the vast majority of British airframe manufacturers stretching back to A. V. Roe’s first efforts in 1908.

One sense that all the pioneers from those distant days onwards would be very proud of the aeronautical progeny of their present-day successor.