Rates for Larger RJs Remain Strong

The operating lease market for regional jets remains a shadow of the narrowbody market but, depending on where the aircraft are leased, the rentals are remaining stable, at least for the larger examples. The regional jet market has failed to elicit the type of response from lessors that has been bestowed on the narrowbody sector, for a number of reasons. The principal market for the regional jet has been the U.S. where tax based financing has been popular and actively promoted by regional jet manufacturers. Out of the total fleet, the proportion left open to lessors is relatively small. The operating lessors, apart from GECAS which has a vested interest with its powerplant, have been cautious in participating in the remaining portion of the market. The amount of work required to lease and manage a regional jet is similar to that of a larger jet yet the returns are smaller. The operating lessor is also conscious that remarketing potential is a major consideration in leasing and that the regional jet market is limited in this respect. For an in-depth analysis of the prospects for regional jets from the Fokker F28 to the Embraer and Bombardier offerings, see the December 11 issue of Aircraft Value News, a sister publication to Regional Aviation News.