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Monday, August 23, 2004

Lease Rates Up A Bit For RJs, But Values Not Climbing

RJ Values Rated For The First Time

While lease rates of regional jets may be experiencing a modest rise due to a variety of factors, values have yet to follow.

Higher operating costs due to rising fuel prices and the dependency on the North American market will be the two main factors in the values of regional aircraft continuing to fall over the coming months, according to sister publication Aircraft Value News.

The high price of fuel can create difficulties for the operating economics of 50-seat regional jets, while turboprops have greater propulsive efficiency on shorter sectors. But with each fuel price increase, the economic range of turboprops increases.

For the first time, AVN rated aircraft values for regional aircraft, with the Bombardier CRJ200ER and the Embraer ERJ145ER topping the list. AVN said the Embraer jet's operator base has been so firmly entrenched that remarketing the aircraft is considered easy. The Bombardier jet could suffer in the future due to rising fuel costs and a saturation of the model in the market.

But most aircraft values are expected to slightly decrease. Meanwhile, leasing rates of regional aircraft have risen modestly this year.