Recovery in Turboprop Values Remains Patchy

The fortunes of the turboprop sector have turned around but values improvement remains sporadic, with older examples available in sufficient quantity as to maintain a clear surplus.

Mesa Air Group, in seeking to meet a demand for services on behalf of Delta, may have found it necessary to scour the Canadian wilderness to locate used Dash8-100s even though there are nearly 30 listed as being in storage. However, the revival of the turboprop sector seems mostly confined to newer types. US Airways is now considering placing an order for a raft of turboprops but only as a means of replacing earlier Dash8s operated by Piedmont. The regional subsidiary operates a fleet of nearly a 100 Dash8s, the majority of which are earlier 37 seat -100s.

The predicament is the same for a number of other types. The Embraer 120 Brasilia continues to face severe excesses with over 60 in storage, representing nearly 25 percent of the fleet. A surplus is normally assumed to exist when five or more percent of the fleet is available. The 19-40 seaters remain the most vulnerable, with little indication of any significant improvement in values. The surplus Saab 340s have been notable for a number of years with over 80 in storage, the larger proportion represented by the seemingly more popular 340Bs. BAE Systems, despite possessing an astute asset management organization, continues to see a surplus for virtually all types. More than a third of the Jetstream 31/32 fleet is in storage, unlikely to ever re-emerge, while there are 33 ATPs also parked in various locations. The Beech 1900D, of which a few were delivered in recent years, features a storage lot of more than 50.

There are just over 7,000 turboprops in service, comprising nearly 80 different types, yet orders remain outstanding on only five types: the AN-140, ATR42, ATR72, Dash8-300 and Dash8-400. The focus of any improvement in the values of turboprops lies very much with the newer examples, leaving the majority of the 600 plus that remain in storage to corrode. While a few more may be cherry picked from what seemed their final resting place, the majority are not likely to take to the air again. The situation will be exacerbated by the renewed enthusiasm for the turboprop, at least those offering modern interiors, performance and efficiency. More early vintage Dash8s, ATR42s, Saab 340s, Beech 1900Ds, and Fairchild Metro 23s will likely enter the parking lot, displaced by more modern types. Values of older turboprops therefore need to be realistic, with the expectation of further deterioration in the short term. While the majority of aging workhorses may languish, those in better condition and able to offer a few more years of relatively trouble free service may still be attractive enough to see service once again.