Not surprisingly, daily departures of turboprops have dropped significantly as regional jets continue to expand in the industry. That decline, however, has slowed rather than increased over the past three years.

Michael Magnusson, president and CEO of Saab Aircraft Leasing told attendees at last month's Regional Airline Association (RAA) conference in Phoenix, Ariz., that turboprop departures dropped only 7 percent between the first quarters of 2002 and 2003, compared to an average 10 percent per year between 2000 and 2003. He also noted that despite the drop in departures, turboprops still account for 60 percent of flights worldwide.

The United States accounted for the largest drop in turboprop flights, losing 44 percent from 2000 to 2003, going from 58 percent of the turboprop market to 47 percent. Europe had a 20 percent decline and the rest of the world dropped by 8 percent. Between 2000 and 2003, turboprops operated by European operators dropped from 56 percent of the total fleet to 47 percent, according to the European Regions Airline Association (ERA).

The biggest decline by aircraft type was for 19-seat turboprops, with a 44 percent drop, followed by a 30 percent drop for 30-seat turboprops and a 21 percent decline for 50- seat turboprops.

From 2000-2003, Saab 340 departures dropped by 32 percent, with the overall loss of 886 daily departures. The largest decline was between 2001 and 2002, followed by the smallest decline between 2002 and 2003. In 2000, Saab 340s were recording roughly 2,750 flights per day. That dropped to just over 2,500 in 2001, then to around 1,900 in 2002. During the first quarter 2003 they were at around 1,800 per day.

The large drop in Saab 340 departures is clearly linked to cutbacks at seven major U.S. hub airports, Magnusson said. American Airlines (NYSE: AMR) requirement to cut back turboprop use in order to put regional jets into service under its scope clause restrictions represented a 66 percent loss in 340 operations. Northwest (Nasdaq: NWAC) had a 26 percent decline in Saab operations at three major hubs and the other U.S. carriers plus the rest of the world accounted for 8 percent.

Of the total drop in Saab 340 usage, Magnusson accounts 58 percent of it to the increase in regional jets, with 31 percent coming from dropped markets and 11 percent to reduction in frequency. Therefore, when the economy recovers, 42 percent of the reductions should come back.

Magnusson expects to see a recovery of turboprop flying in Europe as Saabs migrate from the United States to Europe and elsewhere. Whereas regional jet operations increased 62 percent in 2000 and 74 percent in 2003 in the United States, European RJ operations are growing much more slowly. Several European carriers, in fact, are now reducing their 50- seat RJ fleets, while others are expanding their Saab 340 operations, he said. Since February, Golden Air (Kullaflyg) in Sweden signed up for a third Saab 2000 and extended the lease on another, while Swedline in Sweden added another 340A to their Saab fleet. In Germany, City-Air leased two Saab 340Bs.

>>Contact: Michael Magnusson, Saab, tel: 703-406-7220; e-mail: michael.magnusson@sal.saabus.com<<