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Why wasn't the excellent Avro 530 put into production?
Short answer
Its performance proved good, but not enough of an improvement over the Bristol F.2A's, so no production order was placed. On top of that, priority for the Hispano-Suiza engines that powered the 530 was being given to the S.E.5a. The aircraft first flew in July 1917.

A two-seater against the Bristol F.2A
The Avro 530 was a British two-seat biplane fighter, designed in 1916 to compete with the Bristol F.2A. It was of wood construction covered in fabric and powered by a 200 hp (150 kW) Hispano-Suiza engine. The aircraft first flew in July 1917.
Good, but not good enough
The Avro 530's performance proved good, though not enough of an improvement over the Bristol F.2A's, and so no production orders were placed. There was also another problem: priority in the allocation of the Hispano-Suiza engines that powered the 530 was being given to the S.E.5a.
A second example with a Sunbeam engine
In 1918, a 200 hp (150 kW) Sunbeam Arab engine was fitted to a second 530. Development was then abandoned.
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