BAE Systems Regional Aircraft reports 2010 performance and new deals

At its annual results briefing in London, BAE Systems Regional Aircraft has reported an 18% increase in aircraft placements for 2010 and announced a number of new deals covering regional jets, turboprops and remarketing mandates.

Regional Aircraft placed 52 aeroplanes in 2010, up from 44 in 2009, announced Steve Doughty, SVP sales and marketing. “We supplemented those with 19 other, generally lower-value deals such as short-term lease extensions,” he added.

Unsurprisingly the passenger market saw the bulk of last year’s placements with 41, giving Regional Aircraft a market share of more than 75%, according to Doughty. “There was activity from both new and existing customers, with examples such as Airlink in South Africa rolling its 146 fleet over into Avro RJs,” he noted.

“There was also a new lease of six Avro RJ100s with Swiss. These aircraft – which Swiss was already operating – had been sub-leased from British Airways and have now entered our portfolio with leases until just past the middle of the decade,” Doughty added.

“I feel that we are well placed to drive down the number of our idle fleet (currently 27-28 from a portfolio of around 160 aircraft) by the year end, because we don’t expect to have as high a number of returns coming back as we did last year,” he continued. “When assessing the forward activity, I look out 18 months, so currently that would cover 2011 and first half of 2012. Typically you’re looking at an activity level of 40-50 aircraft over a period like that. Right now we’re seeing a lot of churn in the portfolio.”

Doughty announced that Star Peru has acquired one more BAe 146-200, an ex-Eurowings aircraft, bringing its fleet of the type to nine. The rapidly growing airline now has 14% of the Peruvian market and began international services in 2010.

In the turboprop market, Doughty declared that he wished he had more aircraft to sell, underlining his point by announcing that Regional Aircraft began and ended year with all turboprops placed. “There were seven transactions required in 2010 to keep us with 100% placements, and there is limited availability in 2011,” he admitted.

Nevertheless a new deal was announced with Easy Fly purchasing four Jetstream 41s off lease. The Colombian carrier also bought another J41 from Eastern Airways in a deal brokered by Regional Aircraft’s Asset Management team.

The Asset Management operation also brokered a deal in which Sky Express sub-leased a single J41 from Eastern, taking the Greek airline’s fleet of the type to five.

Doughty highlighted that Asset Management Business Development, which deals in mandates and placements for non-BAE Systems aircraft type, completed seven third-party aircraft placements ranging from Jetstream 41s through MD-83s to a 767-300ER during 2010. “We have entered a tough market with this business, but our proficiency is being recognised and that has yielded a number of contracts to use our expertise,” the SVP remarked.

Doughty then announced that a new mandate has been received from LOT Polish Airlines to remarket three Embraer ERJ 145s which are for sale due to fleet restructuring and new aircraft arrivals. The mandate also includes the sale of a large consignment of spares which can be sold with the aircraft or separately. All three aircraft, which have EASA certification and are configured in a 48-seat arrangement, are expected to be available from late March.

Bernie Baldwin
Editor, Low-Fare & Regional Airlines/
HMS Belfast, London

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