Interest in refurbished aircraft stepped up as customers seek cost-effective transport

Saab Aircraft Leasing (SAL) has sold its first 340 in a corporate shuttle configuration to US charter operator Vee Neal Aviation as demand from corporate operators for out-of-production regional turboprops heats up. The 340A was previously operated by Mesaba Airlines of Cincinnatti, Ohio.

Latrobe, Pennsylvania-based Vee Neal in 1996 became the launch customer for pre-owned BAe Jetstream 31s in a corporate shuttle layout and now operates three of the type on regular and on-demand charters.

Vee Neal president Charlie Frey says: "There is a growing market for turboprops from companies and individuals wanting a cost-effective, high-quality and flexible method of transport. We plan in the next five years to add up to five Saab 340A/Bs and two more Jetstream types."

SAL president Michael Magnusson says there is a market for two 340 shuttles a year. "We hope to pick up business from large corporations which have become disillusioned with the inconvenience of transporting large numbers of employees by airline, and from operators looking to replace older aircraft models."

Magnusson says a refurbished 33-seat 340A is "well priced" at around $2.5 million, and has attracted a lot of interest. "However, the market is cautious at the moment. Our biggest competitor is procrastination, with potential customers saying: 'let's wait another year'," he says.

Around 40 Saab 340s are available, Magnusson suggests, representing 10% of the total fleet. The Saab 2000, with 55 aircraft in airline service, has also become a popular choice of shuttle for operators in Europe and the USA. Three aircraft are operated by General Motors, one of which is subleased to US Indycar racing team Penske Racing. Airbus also operates the type between its Toulouse and Bremen sites. Saab halted aircraft production in 1999.

BAE Systems Asset Management, which manages a portfolio of 240 regional aircraft, is stepping up sales of its J32 as many of the types reach the end of their original financing agreements and become available for lease.

Michael Canzian, Asset Management president, says: "We have witnessed a year-on-year increase in sales of the J31 and J32."

Prices of J31s are in the region of $350,000-$600,000 and J32s cost between $600,000 and $1.2 million.

Source: Flight International