21 Nov 2007 | Ref. 366/2007
Africa’s airlines are recognising the potential of regional jets and are beginning to grow their fleets of these aircraft.
Speaking at the 16th Annual Air Finance for Africa conference in Nairobi on November 21, Nigel Benson, Director Sales and Leasing for BAE Systems Regional Aircraft stated:
“Nearly half of the total African airline fleet are regional aircraft but only 10 percent, or 64 aircraft, are regional jets. However, this figure has increased from only three percent of the fleet total twelve months ago.
“Used regional jets such as the BAe 146, have considerably lower acquisition costs than newer generation aircraft. These lower capital costs outweigh any operating cost advantages of new aircraft, particularly in uncertain markets, or on routes where there is a lot of competition. This also applies to developing routes, often found in Africa, where additional frequencies are required to stimulate traffic and consequently economic growth. The superior cabin space and flexibility of the BAe 146, as well as its large underfloor baggage holds, could also be a telling factor in the African market.”
Mr Benson told the conference that BAE Systems’ studies showed that in the African market the low capital costs of used regional jets are a compelling argument for their economic competitiveness, even in the face of continued high fuel prices. Further, the higher capital cost assets need to be worked hard. This is not always possible given the aviation infrastructure in Africa, , such as with turn-around times at airports.
The conclusion that Africa is realising the potential of the regional jet is borne out by the growth in the BAe 146/Avro RJ penetration of this market over the past year. In addition to Air Botswana as an existing customer of the type, Regional Aircraft placed three BAe 146-200s into SA Airlink during this year.
In addition, new operators have announced their plans to acquire and operate fleets of BAe 146s during 2008. Kenyan carrier Fly540, which is 49% owned by pan-African investment firm Lonrho, is taking three BAe 146s to help its expansion plan into other hubs outside Kenya across sub-Saharan Africa.
Belgium’s Brussels Airlines and Congolese carrier Hewa Bora Airways are creating a new Congolese joint venture carrier, AirDC, to be based at Kinshasa. This new carrier will operate a fleet of BAe 146 and Boeing 737s to feed traffic from 10 domestic and African regional destinations into Brussels Airlines long-haul routes into the Belgian capital.
Mr Benson added: “We are also aware that another entity has purchased six ex-Mesaba Airlines RJ85s for operation in Africa.
“In addition to having some aircraft for sale, BAE Systems can also offer dry leasing as a well-established method of acquisition for regional aircraft, providing flexibility and further reducing capital requirements. Regional Aircraft’s Chapter 3-compliant lease portfolio is well placed to meet the equipment demands of Africa’s regional operators.”
About BAE Systems
BAE Systems is the premier global defence and aerospace company delivering a full range of products and services for air, land and naval forces, as well as advanced electronics, information technology solutions and customer support services. With 96,000 employees worldwide, BAE Systems' sales exceeded £15 billion (US $27 billion) in 2006*.
*On a pro forma basis, assuming BAE Systems had owned Armor Holdings Inc for the whole of 2006
For further information contact:
David Dorman, BAE Systems
Tel: +44 (0) 1582 488336 Fax: +44 (0) 1582 488447
Email: ddaviddorman@aol.com
Issued by:
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Tel: +44 (0) 1252 384605 Fax: +44 (0) 1252 383947
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www.baesystems.com
