BAE stopped making the 146 model in 2001

The number of US airlines fighting bankruptcy has hit use of the BAe 146 regional jet, which BAE no longer builds but still leases and services.

BAE said its regional business would now beat the �26m loss seen in 2004.

But it said the progress made by its defence business would enable the group to hit its overall targets for 2005.

BAE said losses at the regional aircraft division will hit the performance of its commercial aerospace business, which includes the 20% stake it has in Airbus, the European jetliner rival to Boeing.

"An increased loss is now expected in that business and the performance of BAE's commercial aerospace sector in 2005 is now expected to be below that for 2004, despite an improved contribution from Airbus," a company statement said.

The commercial aerospace business made profits of �176m in 2004 compared with �204m the year before.

At a group level, BAE made a pre-tax profit of �566m in the six months to 30 June, up from �470m in the corresponding period in 2004.