Bombardier's (BBD) Rod Sheridan, part of the company's asset management division, says the after market for the 50-seat RJ is much stronger than anticipated and, in fact, he would not have predicted the increasing interest among corporate operators. "Bombardier and Embraer (ERJ) did the right thing," he said, in taking exception to last week's story questioning residuals for the 50 seaters. "We took our foot off the accelerator and aloud the secondary market to develop." Related Story He noted that the market for the 50-seater is very tight noting that Northwest (NWACQ) did not take a handful of aircraft which ended up finding homes as Challenger 850s.
The strategy, he said, is not to try to place aircraft with existing customers but to find new operators for the type. In addition to a new Canadian charter operator for the type as well as ALMA in Mexico, he is working on sales in Russia and in many other parts of the world. Six aircraft have gone into the corporate market and two to the freight market, which he anticipates will grow once the concept is proven by West Air's operation with the Norwegian postal service. It also found new markets in Africa. "We just put a 20,000 cycle aircraft into the corporate market," he said. "I would not have predicted that. The freighter market is not huge because the values are still high but it is getting bigger. When you have a small package freighter that can go 2000 miles in range, you eliminate connections. That should have a big effect four to five years from now."

He also noted how quickly the aircraft left from FlyI were  absorbed. "There were 105 aircraft on the market this time last year," said Sheridan. "In addition to Independence, there was Air Littoral before that. But unplaced aircraft now number under 20 and the market is getting tighter. We have a new customer in Continental Airlines (CAL) through its new partnership with Republic (RJET). Delta (DALRQ) announced it was shedding 50 seaters, but its numbers actually went up. There was only ever five aircraft parked and the -100s have all found homes." He also cited new need at Midwest Airlines (MEH) via its new SkyWest (SKYW) operation.
He noted that appraisers gave a hit to the aircraft a year ago, but they have not repeated the hit. BBD is also going after the operator lessor market which provides liquidity and excellent contacts in many places in the world that need such aircraft. "It is still the cheapest jet and being used on the same mission as narrow bodies but on much thinner routes. If you don't need intercontinental range, a 2,000 range with the same cabin as Global Express is great."