BAE sees stronger demand for Avro RJ/146 fleet

 - February 25, 2011, 6:15 AM

BAE Systems’s asset management division has reported an uptick in demand for its portfolio of pre-owned Avro RJ and 146 regional jets. The UK-based group is also taking on more contracts to remarket other manufacturers’ aircraft and is seeing growth in its product support and engineering activities.

Last year BAE placed 52 aircraft–a 15-percent increase on the number of transactions it completed during 2009. Of these, 45 were BAE-built 146s and Avro RJs. According to the company, the recovery in demand has continued into this year. The most recent deals include the sale of a 146-200 to South American carrier Aerolineas Star Peru and an Avro RJ to the UK’s Titan Airways.

Meanwhile, with airline yields still squeezed due to excess seat capacity and rising fuel costs, demand for BAE’s Jetstream turboprop has also held up well, according to Steve Doughty, senior vice president of sales and marketing. Last year saw a flurry of lease deals and sales, and during January the trend continued with the sale of a 29-seat Jetstream 41 to Easy Fly of Colombia and a sub-lease brokered by BAE in which Sky Express of Greece took a Jetstream 41 from the UK’s Eastern Airways.

Rob Morris, the BAE division’s vice president of marketing and analysis, indicated that demand for the company’s regional jets and turboprops is shifting toward developing world markets in South America, Africa and Asia. In the context of an air transport industry facing another year of squeezed yields, he questioned whether new market entrants like the Mitsubishi Regional Jet and Russia’s Superjet 100 really bring enough added value at the right time. BAE believes that regional airlines might be better served by making best use of existing aircraft while waiting for a next generation of airliners that, in its view, deliver a more significant leap in technology.

Nonetheless, BAE is continuing its powerplant integration work for the MRJ on behalf of Mitsubishi and working in partnership with Pratt & Whitney, Spirit Aerosystems and Goodrich. In fact, its engineering consultancy services are proving to be a growing sideline, with new projects under way for clients such as 146 operator Air Botswana.

The past year has also seen BAE introduce its new TotalSupport rate-per-flying-hour support packages for the 146, Avro RJ and Jetstream. It has also updated its spares supply program called Jetspares 2020. Sean McGovern, the company’s business director for support, said that it is now looking into managing and providing spare parts for operators of other manufacturers’ aircraft. o