Values of turboprops, after mostly falling over the last 15 years, are now stabilizing due to the absence of new models, retirement of older units and the relative higher cost of operating regional jets (RJs).

Turboprop values have been hard hit by the move toward RJs over the last five years. The departure of so many turboprop manufacturers, including Fokker, BAe, Fairchild Dornier and Saab, points to the severity of the situation. Both ATR and Bombardier, the only remaining manufacturers, are turning out new aircraft virtually on-demand and have been doing so for a number of years. The 50-seat RJs have facilitated new routes, new networks and new standards of service.

These market changes over the last few years have increased some demand for turboprops, allowing a measure of stability to emerge for some rentals and values. However, as both rate and values have fallen so dramatically in recent years, stability may have little meaning.

The most attractive turboprops are the Dash8 and the ATR42/72. The Saab 340 is also held in reasonably high regard. Both ATR and Saab Aircraft Leasing are very active in the re-marketing of their products, which has helped sustain values. But the values of the Fokker 50 continue to experience new lows, while those of the Embraer 120 and the 19- seaters are not much better. Any improvement is therefore firmly focused on just a few models.

The turboprop sector has shrunk dramatically; there are about 34 percent fewer turboprops operating in the United States compared to five years ago. At the same time, the number of RJs has increased eight-fold, resulting in more jets than turboprops in service. In Europe, there are still more turboprops than RJs, by a ratio of nearly 2:1. However, the number of turboprops in Europe has declined while the number of RJs has grown. Higher landing charges and shorter sector lengths have enabled turboprops to retain a foothold in the region. Yet, the U.S. market remains the core source of demand for turboprops, just as the RJ sector is almost entirely dependent on the country.

The number of turboprops in storage remains depressing. There are nearly as many turboprops parked as there are in service in the United States. About 30 percent of Jetstream 31/32s are in storage. More than 25 percent of the Embraer 120s are also parked. There is little chance that such a large number of aircraft will ever be re-absorbed back into the fleet. Indeed, many parked aircraft are in such dire condition that scrapping rather than parting out remains the more viable option. The conversion of older units to freighters will help those models maintain their values, but with nearly 900 in storage, such conversions may not help much.

RJ operating costs have not proven to be very advantageous on shorter sectors. The benefits of RJs are obtained when they fly at higher altitudes and on longer routes. In an environment of sustained low yields and passenger preference for surface transportation, the turboprops have sometimes been welcomed back as a means of offering a low-cost and reliable alternative on sector lengths of less than 300 nautical miles. Qantas is now considering a new order for Dash8-300s and -400s, and the -400s may replace BAe146s currently in service.