BRITISH AEROSPACE'S success in turning round its ailing regional-aircraft operations has been further underlined by a record performance from its leasing organisations, which manage the regional jet and turboprop fleets still held on the group's books.

The idle fleet of BAe 146 regional jets has been eliminated over the past year, says Robin Southwell, managing director of Asset Management Organisation (AMO), which handles a fleet of more than 100 of the aircraft.

After signing up 30 new leases and another 30 lease extensions during 1994, AMO is "...beginning to run out of aircraft", says Southwell. He adds that, as supply and demand come back into balance, the focus for 1995 will be to look for better-quality business and improved lease terms.

"Lease rates are already beginning to move up, especially in ¼Europe," he says. Lease rates are around 20% higher than they were two years ago and the length of lease deals is edging up, from two years, to the five-year mark.

JSX, which handles a portfolio of over 400 turboprops, has also whittled its idle fleet down to around 24 aircraft, after placing 78 airliners during 1994.

The bulk of the fleet is made up of 19-seaters, including 297 Jetstream J31/32s and seven Fairchild Metro IIIs inherited from previous deals. All the Metros were placed in the year, while 20 Jetstreams are without a home.

"There continues to be a fairly robust market in the leased 19-seat market. Having placed a very significant number of aircraft, we're now beginning to see some hardening of rates," says Stephen O'Sullivan, JSX vice-president for sales and marketing.

JSX is also moving to free up part of the 19-seater fleet, which has been restricted to the US market because of tax blocks in the original head leases arranged by BAe. "We're close to receiving release on at least 25 for worldwide use," says O'Sullivan. A recovering South American market, especially that of Argentina, is one potential destination.

Source: Flight International