Saab Aircraft Leasing weathers storm with solid customer base & increased popularity of turbopro

Friday 17th October, 2008

Saab Aircraft Leasing weathers storm through solid customer base and increased popularity of turboprops
Will the age of ‘independent’ airlines ever come back in the USA?, Michael Magnusson, President and CEO Saab Aircraft Leasing questioned last week, speaking at his annual press briefing to media at the European Regions Airline Association in Manchester.

He highlighted that many of Saab’s non US customers were independent among them in Europe, Eastern Airways, Loganair, Carpatair of Romania, OLT of Germany and Golden Air of Sweden and Rex in Australia – all of whom were doing well and making money in this current difficult environment.

“With 69 operators in 36 countries we have a well dispersed fleet. This is important as it means we are not exposed to any individual markets,” he said. “We have also been careful over the years. We have a strong credit department and healthy customers who keep up their payments.”

This year has been a quiet year for Saab Aircraft Leasing, he highlighted, with little movement on the Saab 340 and 2000 fleets. April was its busiest month with Sweden’s Air Express extending leases on two Saab 2000s; Eastern Airways, UK, signing for two more 2000s and Western Air of the Bahamas purchasing its leased 340A. In August Murray Aviation of the USA renewed its Saab 340A lease. Magnusson announced at ERA that Loganair of Scotland, now a Flybe franchise airline, had purchased a Saab 340A, which it will dedicate to cargo operations. This takes the number of Saab 340s operating in the cargo role to 38 around the world and by year end Rex of Australia too will have introduced the type into cargo operations. Saab is further modifying the cargo conversion to include more options, including a reinforced floor. Field Aviation of Canada is partnering Saab on this programme.

“As fuel prices go up, the demand for turboprops increases. Furthermore, the market for these used aircraft will be less affected by the recession, believes Magnusson, owing to their lower operating and capital costs. All 58 Saab 2000s are now flying and there are few Saab 340As and Bs from the worldwide 414-fleet becoming available. Saab Aircraft Leasing is currently remarketing two Saab 340As for AeroCentury, plus two 340Bs for TurboLease, both US-based. SAL is also happy to work with other, recognized aircraft remarketing agents.

For the first time, worldwide, the number of regional jets advertised for sale worldwide in October (in the 30 to 50-seat sector) has out-numbered turboprops, Magnusson noted. Regional jets reached their peak four years ago, he outlined, while the turboprop market is still stabilising. Even in the US market, the number of 50 seat RJs is down 10%. A particularly strong market for future growth is Russia, says Magnusson, bolstered by the government’s recent decision to remove import taxes on aircraft up to 50 seats.

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