29 Jan 2009 | Ref. 015/2009
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Avro Business Jet interior
BAE Systems Regional Aircraft stated today that its lease portfolio and support businesses remained strong in 2008, despite the difficult economic climate.
Alan Fraser, Managing Director of Regional Aircraft said: "The Regional Aircraft team has performed well winning significant new business across all sectors despite a worsening trading environment as the global recession bites into the airline sector.
"Whilst we are not complacent and, indeed, face several challenges in 2009, the customer base for our portfolio products continues to grow and we are active in several different market sectors. Our support business remains robust and our focus in the year ahead will be on maintaining high level support to our customer base."
During 2008 the Asset Management team of Regional Aircraft placed 75 aircraft through new leases, extensions with existing customers and sales.
In a challenging market, lower capital cost assets are attractive as a reduced risk fleet solution.The asset management team maximised portfolio opportunity by addressing every possible market niche with this proposition.
The Avro RJ portfolio remained strong in Europe, but is also finding favour in developing markets, while the BAe 146 operator base is diversifying with nine new operators added in 2008. There was renewed interest in the ATP as a passenger aircraft, but 80 percent of the global fleet has now been converted to freighter configuration. The Jetstream portfolio registered a zero idle fleet in 2008 and availability is expected to remain limited in the future.
The current market conditions mean that significant third-party opportunities now exist for Asset Management's newly strengthened Business Development team to win remarketing mandates and lease advisory services.
Regional Aircraft's support businesses covering continuing spares sales, 'rate per flight hour' contracts and modifications contracts also performed well.
During the year, 17 more aircraft were added to the 'rate per flight hour' programmes and 50 aircraft had their contract terms extended - a strong vote of confidence in the offering from Regional Aircraft. Customers doing new business during the year included SA Airlink, Malmö Aviation and Blue 1 on the BAe 146/Avro RJ, Atlantic Airlines on the ATPF and Agni Air and Sky Express on the Jetstream 41. Just over 180 aircraft are now enrolled on to these programmes.
Despite a difficult trading market for continuing spares sales, Regional Aircraft's focus on its top 20 customers led to a 10 per cent revenue increase across this group, with the Co-op programme (continuing sales rebate scheme) generating additional revenue and consolidating relationships with blue chip European customers. The spares on the web programme, through the Regional Aircraft customer portal, now generates 35 per cent of overall spares sales volume transactions.
The modifications business was active during the year with work for customers including CityJet, SA Airlink and the Lufthansa Regional group. The growing Avro Business Jet activity also led to significant gains with completion centres ordering a range of modifications for customers such as the Dubai Air Wing.
Regional Aircraft's engineering team also had a strong 2008 winning substantial work packages on the Future Carrier (CVF) from BVT Surface Fleet to add to its existing Nimrod MAA4 work, activity on Unmanned Air Vehicles and increased consultancy on both aviation and non-aviation projects. In addition, iSapphire, Regional Aircraft's internet delivery of technical publications, was commissioned, and now saves an estimated six million sheets of paper per year.
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 approximately 100,000 employees worldwide, BAE Systems' sales exceeded £15.7 billion (US $31.4 billion) in 2007.
For further information contact:
David Dorman, BAE Systems
Tel: +44 (0) 1582 488336 Fax: +44 (0) 1582 488447
ddaviddorman@aol.com
Stephen Bethel, BAE Systems
Tel: + 44 (0) 1252 384029 Mob: + 44 (0) 7793 426328
Stephen.bethel@baesystems.com
Issued by:
BAE Systems, Farnborough, Hampshire GU14 6YU, UK
Tel: +44 (0) 1252 384719 Fax: +44 (0) 1252 383947
24hr media hotline: + 44 (0) 7801 717739
www.baesystems.com
