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MARKET REPORT - Saab Aircraft Leasing

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Issue 20 OCTOBER 2008<br />

<strong>MARKET</strong> <strong>REPORT</strong><br />

A PUBLICATION OF SAAB AIRCRAFT LEASING<br />

ESTONIAN AIR’S<br />

SAAB 340s<br />

FEED SAS SYSTEM<br />

OLT CELEBRATES<br />

50TH ANNIVERSARY<br />

SAAB 340 FLIES<br />

EXECUTIVE-STYLE


MESSAGE FROM<br />

Michael Magnusson<br />

CONTENTS<br />

The last six months have yet again shown how difficult<br />

it is to make any predictions in this industry. Towards<br />

the end of last year, most airlines were looking forward<br />

to 2008 with confidence. IATA was predicting a nice<br />

profit. Oil was hovering around $90/barrel. The $100<br />

number seemed far away.<br />

Then as 2008 began, oil started its rapid climb. The industry watched in horror as it<br />

peaked around $145/barrel after just six months. Panic started spreading around<br />

many boardrooms. Predictions and business plans for 2008 were thrown out the<br />

window. Airline managers began saying this was worse than September 11. IATA<br />

revised its forecast on a monthly basis and was soon talking about billion dollar<br />

losses. Something had to be done, the business model was broken.<br />

The legacy airlines in the US made their decision, initiated by American Airlines.<br />

They would cut capacity 10-12 percent by the end of 2008 and park many aircraft,<br />

mostly older equipment. A few decided to accelerate deliveries of new fuel-efficient<br />

aircraft. Europe was affected to a lesser degree as it was partially shielded by the<br />

decline of the US dollar. One interesting result was low fare airlines were affected<br />

to a greater extent due to fuel being a much higher proportion of their expenses,<br />

reaching almost half. For legacy airlines it became the largest expense, hovering<br />

around 35 percent.<br />

Estonian Air <strong>Saab</strong> 340s work with Boeing 737s<br />

for SAS Connect Service . . . . . . . . . . . . . . . . . . . . . . . . . . 3<br />

Air Åland and Avitrans Nordic work together<br />

to provide Finland/Sweden service . . . . . . . . . . . . . . . . . . . 5<br />

<strong>Saab</strong> 2000 simulator moves to<br />

Oxford Aviation Academy . . . . . . . . . . . . . . . . . . . . . . . . . . 7<br />

Darwin Airline supports Euro 2008 . . . . . . . . . . . . . . . . . . . 7<br />

OLT celebrates 50th anniversary. . . . . . . . . . . . . . . . . . . . . 8<br />

<strong>Saab</strong> 2000 AEW&C on display at Farnborough . . . . . . . . . 8<br />

<strong>Saab</strong> 340 executive aircraft round-up. . . . . . . . . . . . . . . . . 9<br />

SAL’s Michael Magnusson assesses used<br />

turboprop market. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10<br />

<strong>Saab</strong> Destinations: Dalanzadgad Airport . . . . . . . . . . . . . . 11<br />

<strong>Saab</strong> operators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12<br />

This, of course, soon impacted regional airlines as well. In the US, a few legacy<br />

airlines began cancelling contracts for capacity buys, some ended up arguing in<br />

court. Suddenly everyone had too many 50-seat regional jets. It is now forecast<br />

over 200 of these RJs will become surplus in the US over the next few years. A<br />

Delta executive referred to these RJs as the “SUV in the air with the highest fuel<br />

consumption per seat basis.”<br />

This was bound to have an impact at <strong>Saab</strong> as well. American Eagle was forced to<br />

cut capacity and obviously chose the smallest aircraft in its fleet: the <strong>Saab</strong> 340<br />

and E-135. They have 27 <strong>Saab</strong> 340Bs in service, which will be parked during the<br />

rest of 2008 and early 2009. They have already sold a few. As supply of <strong>Saab</strong><br />

340Bs is tight, this move by AMR Eagle will be appreciated by those seeking a<br />

fuel-efficient, 30-seat aircraft with excellent customer support.<br />

This shows, yet again, the need to be flexible and pick the right equipment. Most<br />

<strong>Saab</strong> operators appreciated its low fuel burn when oil prices were soaring. The very<br />

fuel-efficient GE engine came through again as a good benefit to the <strong>Saab</strong> 340.<br />

Who knows where oil prices will stabilize Currently oil is $110/barrel. With this<br />

level and a fuel-efficient aircraft, the business model works with the <strong>Saab</strong> 340.<br />

Many of our customers are showing this in their numbers. One, OLT in Germany, is<br />

celebrating its 50th anniversary, and they have flown the <strong>Saab</strong> 340 nine out of<br />

those 50 years. (See related story on page 8.) Rex posted another profitable year<br />

with its all <strong>Saab</strong> 340 fleet.<br />

Over the next few months we will be participating in a couple of events, namely the<br />

<strong>Saab</strong> 340 Global Operators’ Conference in Florida and the ERA General Assembly<br />

in Manchester. The <strong>Saab</strong> 340 Global Operators’ Conference is looking to be another<br />

great event organized by <strong>Saab</strong> Aerotech. I urge all <strong>Saab</strong> 340 operators to attend.<br />

We have a good time as we exchange experience in the type. See you there!<br />

COVER PHOTO:<br />

Estonian Air feeds the Scandinavian Airlines System via<br />

Stockholm, Oslo and Copenhagen with two <strong>Saab</strong> 340s and<br />

six Boeing 737s.<br />

Cover photo by Eryl Crump<br />

BELOW:<br />

OLT, Germany’s second oldest airline, hosted a special 50th<br />

anniversary party at the airline’s Emden base.<br />

The <strong>Saab</strong> 340 can provide a reliable and economical transport<br />

for business executives in stylish comfort.<br />

Market Report is published by<br />

<strong>Saab</strong> <strong>Aircraft</strong> <strong>Leasing</strong><br />

Editor: Kelly Murphy<br />

Emerald Media<br />

kelly@emeraldmediaus.com<br />

Europe: Alison Chambers<br />

Emerald Media<br />

alison@emeraldmedia.co.uk<br />

Design and Layout:<br />

Aeris Graphic Design<br />

jennifer@aerisgraphicdesign.com<br />

Michael Magnusson<br />

President and CEO, <strong>Saab</strong> <strong>Aircraft</strong> <strong>Leasing</strong><br />

Printed in USA October 2008<br />

©2008 <strong>Saab</strong> <strong>Aircraft</strong>


<strong>MARKET</strong> <strong>REPORT</strong><br />

ESTONIAN AIR SAAB 340s<br />

WORK WITH BOEING 737s FOR SAS<br />

CONNECT SERVICE<br />

Story and photos by Eryl Crump<br />

Estonian Air has increased its cost-effective regional air service since<br />

the introduction of two <strong>Saab</strong> 340s last fall. The national airline of<br />

Estonia, the Tallinn-based airline feeds into the Scandinavian Airlines<br />

System (SAS) network via Stockholm, Oslo and Copenhagen with a<br />

fleet of six Boeing 737-500s and two <strong>Saab</strong> 340s.<br />

Operating as Estonian Air Regional, a wholly-owned subsidiary company<br />

with its own AOC and Operators License, the 33-seaters are servicing<br />

Estonian Air flights between Tallinn-Helsinki, Tallinn-Vilnius,<br />

Tallinn-Minsk, Tallinn-Stockholm and Kuressaare-Stockholm.<br />

Estonian Air Vice President-Operations Rait Kalda tells <strong>Saab</strong> Market<br />

Report, “By introducing the <strong>Saab</strong> 340 into the existing fleet of<br />

Boeing 737s, Estonian Air hopes to capture and develop the growing<br />

demand for air travel between Estonia and our neighboring regions.<br />

The aircraft has a comfortable cabin with leather seats. All flights are<br />

operated with one service class with the service level depending on<br />

the destination. Flights from Tallinn to Vilnius and from Kuressaare<br />

to Stockholm includes a meal service, while flights from Tallinn to<br />

Helsinki and Kuressaare offer beverages only due to the short flight<br />

time.”<br />

Kalda notes the schedule (to Helsinki, Vilnius and Stockholm) has<br />

been designed to meet the demand of the Estonian market, by offering<br />

an early morning departure from Tallinn together with an evening<br />

return flight. Flights from Tallinn to Kuressaare and from Kuressaare<br />

to Stockholm are operated twice a week, enabling both longer spa<br />

holidays and weekend breaks. “They are proving to be very successful<br />

and have increased our regional service very efficiently and cost<br />

effectively,” he adds.<br />

Initially the aircraft were operated by Swedish airline Golden Air.<br />

Market Report | October 2008<br />

3


<strong>MARKET</strong> <strong>REPORT</strong><br />

Kalda underlines “Until finalizing necessary documents, Golden Air<br />

operated the flights instead of Estonian Air Regional, but the service<br />

on board was according to Estonian Air standard.”<br />

On March 6, 2008 Estonian Air Regional received the air carrier’s<br />

Operating License from the Estonian Ministry of Economic Affairs<br />

and Communications and the Air Operator Certificate (AOC) from<br />

Estonian Civil Aviation Administration. “This made it possible to<br />

enter the <strong>Saab</strong> 340 aircraft into the Estonian aircraft registry. Having<br />

our own AOC and Operating License simplifies running of the company<br />

and make the operations even more effective,” adds Kalda.<br />

In the first eight months of 2008, Estonian Air carried 483,875<br />

passengers, a 10.3% increase year-on-year. In August, Estonian Air<br />

flew 73,335 passengers, a 1% increase year-on-year despite the drop<br />

in charter operations.<br />

Government beginnings...<br />

Estonian Air was established and started operations on December 1,<br />

1991, shortly after Estonia reacquired independence. It was founded<br />

by the Estonian government with aircraft acquired from the defunct<br />

local Aeroflot Division and was partially privatized five years later.<br />

The privatization allowed the acquisition of Boeing 737-500s to replace<br />

its old Soviet planes. The first two arrived in 1995 and by the<br />

following year, after obtaining more of the Western-built aircraft, it<br />

was able to retire the Soviet fleet entirely. The airline now operates six<br />

of the type and next spring will introduce two new Bombardier CRJ-<br />

900NG aircraft.<br />

Estonian Air has strong links with SAS. It operates frequent flights to<br />

SAS hubs – the airline boasts “Well connected with SAS” status and<br />

the airline’s frequent flyer program is SAS’ EuroBonus scheme.<br />

4<br />

Market Report | October 2008


<strong>MARKET</strong> <strong>REPORT</strong><br />

AIR ÅLAND AND AVITRANS NORDIC<br />

WORK TOGETHER TO PROVIDE<br />

FINLAND/ SWEDEN SERVICE<br />

Story and photos by Eryl Crump<br />

Flights to the beautiful Åland<br />

islands, an archipelago that<br />

stretches from the Finnish coast<br />

southwest towards Sweden, are<br />

flown by a new operator. Avitrans<br />

Nordic AB, which already operates<br />

air traffic with <strong>Saab</strong> 340 for<br />

several airlines, began flying from<br />

Mariehamn to Helsinki and<br />

Stockholm for Air Åland on<br />

August 11. Two Avitrans <strong>Saab</strong><br />

340s are based at Mariehamn for<br />

the flights.<br />

Avitrans Nordic President Mikael<br />

Wångdahl says, “We are delighted<br />

that Air Åland chose Avitrans<br />

Nordic as a supplier and look forward<br />

to working with them. This<br />

expansion of activities is part of<br />

our long-term strategy to establish<br />

operations in Finland. Avitrans has the right aircraft and the competence<br />

to be a part of Air Åland continued service development.<br />

Air Åland CEO Jörgen Gustafsson adds, “We have a new long-term<br />

supplier with Avitrans Nordic. The combination of Avitrans Nordic<br />

and Air Åland looks exciting for the future. This gives us a platform<br />

for the company’s future development that no other operator could<br />

offer. The synergies that exist will make us stronger in the market<br />

and be able to strengthen our customer focus, which is a goal for<br />

the future.”<br />

Operations started on October 29, 2005. Air Åland operates scheduled<br />

services from Åland to Helsinki four times a day and twice each<br />

weekday to Stockholm.<br />

The beautiful Åland Islands<br />

Air Åland is the provincial airline of the islands and is based in<br />

Mariehamn, the archipelago’s only airport.<br />

The airline was founded on January 14, 2005 with a broad base of<br />

owners within the trade and business of the Åland islands. The goal of<br />

the owners is to maintain air traffic with good quality for a low price<br />

to mainland Finland and Sweden.<br />

Market Report | October 2008<br />

5


<strong>MARKET</strong> <strong>REPORT</strong><br />

Air Åland AB was created in 2005<br />

Gustafsson tells <strong>Saab</strong> Market Report discussions on starting an Ålandbased<br />

airline company have been ongoing for a long time. “A regular<br />

air traffic service both west- and eastwards is vital for the competitiveness<br />

and development of Åland economy. Thus, the company Flyg &<br />

Far Åland AB, later Air Åland AB, was founded in January 2005. The<br />

shareholders include 24 companies and four private investors. The<br />

overall goal of the owners is to maintain and secure air traffic based<br />

on local requirements, reasonable prices and to contribute to the development<br />

of the local trade and the core businesses.<br />

“The first flights were to Helsinki, and on March 13, 2006 the traffic<br />

was started between Mariehamn and Stockholm-Arlanda,” he notes.<br />

Last year the airline carried about 60,000 passengers on its scheduled<br />

flights. Charter flights from the islands to the mainland and further<br />

afield were also carried out.<br />

Until August the airline’s operations were carried out by UAB Avion<br />

Express, previously Nordic Solution Air Services. The new name was<br />

adopted in January when Icelandic company Avion <strong>Aircraft</strong> Trading<br />

purchased the company.<br />

Avitrans Nordic has also taken over flying operations for Wingo<br />

Express. The company was founded in 2007 and is owned by the<br />

Swedish Tamares Holding Sweden AB and Scanproducts Ltd, in<br />

addition to the Finnish Oy Touch N´ Go AB and Eriksson Capital AB.<br />

Wingo Express began operating a twice-weekday service between<br />

Turku and Tampere in southern Finland to Oulu in the north in<br />

January 2008 with a <strong>Saab</strong> 340 operated by UAB Avion Express. It has<br />

carried about 20,000 passengers on the service which links three important<br />

business centers – Tampere is the nearest airport to the town<br />

of Nokia, the mobile phone manufacturing company.<br />

6<br />

Market Report | October 2008


<strong>MARKET</strong> <strong>REPORT</strong><br />

SAAB 2000<br />

SIMULATOR MOVES<br />

TO OXFORD<br />

AVIATION ACADEMY<br />

A <strong>Saab</strong> 2000 simulator, formerly used by Crossair in Basle,<br />

Switzerland, recently joined a <strong>Saab</strong> 340 simulator among 12 full flight<br />

simulators at the Oxford Aviation Academy (OAA) in Stockholm,<br />

Sweden.<br />

OAA recently acquired General Flying Services, a leading ab initio<br />

airline pilot training program in Australia. The acquisition, backed by<br />

STAR Capital Partners, is a key strategic addition to the Group’s<br />

Aviation Training-Ab Initio division which also comprises the former<br />

Oxford Aviation Training, one of the world’s largest and most respected<br />

airline pilot training school.<br />

The Group was created in February 2007 through the US$275 million<br />

merger of GE Commercial Aviation Training and SAS Flight<br />

Academy, followed by the BAE Training Center in Manchester, UK.<br />

In addition, Par Aviation was recently acquired, adding aviation resourcing<br />

to the Group portfolio.<br />

DARWIN AIRLINE<br />

SUPPORTS EURO 2008<br />

Darwin Airline flew 20 flights in support of the Euro 2008<br />

soccer tournament held in Switzerland and Austria in June.<br />

The Lugano-based regional airline formed a partnership with<br />

the football associations of Germany and Sweden who had<br />

chosen the town of Ticino as their base for the championships.<br />

A <strong>Saab</strong> 2000 was used to fly the team, their support<br />

staff and officials from Lugano to Vienna, Basel, Innsbruck,<br />

Salzburg and Klagenfurt where their matches were played.<br />

All four of the airline’s aircraft were adorned with a special logo for the<br />

three-week long tournament. The final flight was made on June 27<br />

when the German team was flown to Vienna for the final. In an exciting<br />

match, the Spanish national team emerged victorious.<br />

Darwin Airline Charter and Sales Network Manager Barbara Strub says:<br />

“Darwin Airline is not new to this type of service. We have hosted on<br />

board several teams, both national and international, confirming we are<br />

able to please customers seeking a particular type of treatment and<br />

adapted to their needs.”<br />

Market Report | October 2008<br />

7


<strong>MARKET</strong> <strong>REPORT</strong><br />

OLT CELEBRATES 50TH ANNIVERSARY<br />

Germany’s second oldest airline, regional carrier OLT<br />

(Ostfriesische Lufttransport GmbH), celebrated its 50th<br />

anniversary with a special party at the airline’s Emden base<br />

on September 12.<br />

fleet reflects the nature of operations. At the same time, while we are a<br />

small airline, we operate on a much broader level through key strategic<br />

partnerships with bigger airlines – SAS, Malev, Icelandair and SN<br />

Brussels.”<br />

OLT was founded in 1958 at Emden and is owned by two shipping<br />

companies, Reederei Agems (74.9%) and FLN Frisia Luftverkehr<br />

(Reederei Norden-Frisia) (25.1%). Initially, the airline operated air taxi<br />

flights to islands in the North Sea. Services were expanded to charter<br />

flights within Europe and in 1991 to scheduled services on domestic<br />

regional routes from Bremen.<br />

Co-Managing Director Dr. Berhard Brons adds: “Over the past 50<br />

years our company’s success has been based on the fact that OLT has<br />

always paid attention to customer demand and, with a great degree of<br />

flexibility, has developed promising niche markets. Larger carriers<br />

often ignore destinations with regular passenger loads of 20-100 passengers.<br />

That’s exactly where our strength lies.”<br />

A steady expansion of the regional timetable has continued since<br />

1993, starting with scheduled flights to Bremen-Brussels and<br />

Nuremberg. These are now operated by a fleet of <strong>Saab</strong> 2000s and<br />

<strong>Saab</strong> 340s, assisted by Metroliners and Fokker 100s.<br />

“Niche operations is what we have always been about,” says Managing<br />

Director Gerd Weber. “We go to places that other airlines don’t and our<br />

The first <strong>Saab</strong> was introduced in 1999 when the airline was looking<br />

for a larger aircraft and was drawn to <strong>Saab</strong> aircraft because of its superior<br />

comfort and strong product support.<br />

“From the outset, the aircraft was popular with passengers and it was<br />

not long before a bigger aircraft was required as OLT looked to add<br />

more international services,” notes Weber.<br />

SAAB 2000 AEW&C ON<br />

DISPLAY AT FARNBOROUGH<br />

The <strong>Saab</strong> 2000 ERIEYE Airborne Early Warning & Command System<br />

(AEW&C) took a brief pause from its successful flight test program to<br />

make a debut appearance at the Farnborough International Air Show in<br />

July. The flight test program began in April in Linköping and moved to<br />

Granada, Spain for the favorable weather and hot and high conditions during<br />

the summer prior to arriving at the world’s largest air show. Towards<br />

the end of this year, the aircraft will be handed over to <strong>Saab</strong> Surveillance<br />

Systems to implement the systems testing phase of the program.<br />

The <strong>Saab</strong> 2000 AEW&C is an advanced tactical surveillance system. It<br />

utilizes the latest generation Active Electronically Scanned Array ERI-<br />

EYE radar, now capable of detecting small air and sea targets, hovering<br />

helicopters and cruise missiles. It has a 450km instrumented range<br />

and provides coverage at 20km (65,000 ft) and can effectively survey a<br />

500,000 square meter area and automatically track priority targets. In addition<br />

to the AEW&C role, the aircraft can be used for national security<br />

and border protection missions, as an airborne command and control for<br />

disaster management coordination or emergency air traffic control.<br />

8<br />

Market Report | October 2008


<strong>MARKET</strong> <strong>REPORT</strong><br />

SAAB 340 EXECUTIVE AIRCRAFT ROUND-UP<br />

by Paul Bryson<br />

The <strong>Saab</strong> 340 executive aircraft has proven to be as dependable<br />

and economically attractive as it is with the airlines of today.<br />

Whether used for charter contracts to favorite vacation destinations<br />

or in the private sector as a means of bypassing the world’s busier<br />

airports and delays associated with them, <strong>Saab</strong>’s quality of reliable<br />

service and its high level of customer support provides the basis for<br />

successful operations in the future. Here is an update on a few<br />

models operating in the US.<br />

NAPLETON AVIATION GROUP<br />

The executive-configured <strong>Saab</strong> 340 is one of the most exclusive configurations available. Napleton Aviation Group’s <strong>Saab</strong> 340A-036 is a prime<br />

example of many years of executive service with various operators. In 1985, the APU equipped 036 was first delivered to corporate giant<br />

Philip Morris and after several years of faithful service, it moved on to AMP, a global electronic company now known as Tyco, for the balance<br />

of the century. Prior to service with Napleton, it flew corporate services for Anglo American, which is a worldwide group of companies involved<br />

in natural resources including mining. <strong>Aircraft</strong> N727DL was<br />

purchased by Napleton in late 2003 for use in FAA Part 91 operations<br />

(private transport) for the Group.<br />

Today the aircraft features a recent interior makeover by Elliott<br />

Aviation of Moline, Illinois. Its interior has been updated to current<br />

executive standards which include drop down flat screen televisions,<br />

leather seats, wet bars, work stations and other select amenities typically<br />

found in a corporate aircraft cabin.<br />

According to Napleton Director-Operations and Chief Pilot Harold<br />

Ebenroth, the aircraft is providing FAA Part 135 charter services in<br />

the Chicago area through DB Aviation.<br />

IBC AIRWAYS<br />

<strong>Saab</strong> 340A-029 has found a new<br />

home with IBC Airways based in<br />

Miami, Florida. IBC acquired 340A-<br />

029 in May of this year, its seventh<br />

<strong>Saab</strong> 340 (the first six are in cargo<br />

configuration), and had the aircraft<br />

in executive operations by late July.<br />

The aircraft was previously with<br />

Indiana University for nearly eight<br />

years operating as a sports team and<br />

executive shuttle. It features a 1+1<br />

configuration with 18 oversized leather seats and an APU.<br />

JMJ FLIGHT SERVICES<br />

Privately owned <strong>Saab</strong> 340A-050 of Harmony Investments is<br />

operated by JMJ Flight Services based in Virginia Beach and<br />

features an updated interior. The aircraft has a unique prop<br />

brake allowing the engine to operate while the prop remains<br />

still. This gives the operator the ability to use electrical amenities<br />

driven by engine power, including air conditioning and<br />

cabin lighting while on the ground. JMJ First Officer Tim Miller<br />

notes the aircraft is a hard-working asset which is constantly<br />

being scheduled for operation.<br />

PEGASUS AIR<br />

Quite like 340A-036, aircraft 340A-042 has also experienced an<br />

extensive overhaul of its interior which was completed by Fort<br />

Lauderdale based, PRO <strong>Aircraft</strong> Interiors. This aircraft flies with<br />

Pegasus Air, a private operator for the owners of the Ritz-Carlton in<br />

the Cayman Islands. It has undergone extensive interior refurbishments<br />

and redesign with STCs in place. Pegasus Air Chief Pilot<br />

Tyson Chavez tells <strong>Saab</strong> Market Report this refurbishment is two<br />

years in the making and is well worth the wait.<br />

Market Report | October 2008<br />

9


<strong>MARKET</strong> <strong>REPORT</strong><br />

SAL’S MICHAEL MAGNUSSON ASSESSES<br />

USED TURBOPROP <strong>MARKET</strong><br />

The current economic environment<br />

has set the stage for a market which<br />

is “not black and white and one in<br />

which aircraft operators sway between<br />

RJs and turboprops,” SAL<br />

President and CEO Michael<br />

Magnusson opined at the recent US<br />

Valuation Conference organized by<br />

Commercial Aviation Events in<br />

Washington, DC. With the supply of<br />

used turboprops continuing to decline,<br />

Magnusson noted the supply<br />

of good <strong>Saab</strong> 340s is at an all time<br />

low. American has begun its<br />

planned phase out of 27 <strong>Saab</strong> 340s<br />

and will complete the plan by Spring<br />

2009. These aircraft are already<br />

finding new homes. Most recently,<br />

two have been delivered to<br />

Australian regional MacAir of<br />

Queensland. Operational by the end<br />

of 2008, MacAir already operates six<br />

<strong>Saab</strong> 340Bs.<br />

30- and 50-seat Turboprops & Regional Jets (Worldwide)<br />

In both the passenger and cargo operations, the<br />

<strong>Saab</strong> 340 maintains a leading position in the 30-<br />

seat market with nearly 40 <strong>Saab</strong> 340A models<br />

used as cargo aircraft.<br />

The <strong>Saab</strong> 340 fleet has passed the 13 million<br />

flight hour mark with 414 aircraft flying with 60<br />

operators in 31 countries. The <strong>Saab</strong> 2000 fleet<br />

has flown 1.1 million flight hours with 58 aircraft<br />

flying with 13 operators in 11 countries.<br />

Average Daily Departures<br />

10000<br />

Totals<br />

3Q01 (17941) 3Q02 (17527) 3Q03 (17749) 3Q04 (18482)<br />

3Q05 (18888) 3Q06 (18110) 3Q07 (17994) 3Q08 (16926)<br />

8000<br />

6000<br />

The total number of flights for the<br />

30- to 50-seat daily departures<br />

worldwide are down 6% over the<br />

last seven years from 18,000 to<br />

17,000, while the total number of<br />

flights has been stable during the<br />

same period in North America. (See<br />

charts at right)<br />

4000<br />

2000<br />

0<br />

- 50% - 17% - 29% + 73%<br />

30-seat TP 50-seat TP 30-seat RJ 50-seat RJ<br />

The 70-seat market is “where the action<br />

is,” says Magnusson with worldwide<br />

departures growing from 1,700<br />

per day to nearly 5,000 daily.<br />

Possible recession trends include the<br />

effect on regionals as legacy airlines<br />

cut back operations by 10-12 percent<br />

and the 50-seat RJ surplus of<br />

200-300 aircraft over the next few<br />

years will need to be replaced.<br />

30- and 50-seat Turboprops & Regional Jets (North America)<br />

Average Daily Departures<br />

10000<br />

Totals<br />

3Q01 (10303) 3Q02 (10103) 3Q03 (10767) 3Q04 (11623)<br />

3Q05 (11998) 3Q06 (11258) 3Q07 (11162) 3Q08 (10120)<br />

8000<br />

6000<br />

4000<br />

-8%<br />

“My gut feeling is that used turboprops<br />

will be less affected by the recession<br />

due to lower operating and<br />

capital costs,” he concluded.<br />

2000<br />

0<br />

- 58% - 47% - 33% +104%<br />

30-seat TP 50-seat TP 30-seat RJ 50-seat RJ<br />

10<br />

Market Report | October 2008


<strong>MARKET</strong> <strong>REPORT</strong><br />

SAAB DESTINATIONS<br />

by Paul Bryson<br />

Dalanzadgad<br />

Special Facts<br />

Population:<br />

17,000 inhabitants<br />

Average annual rainfall:<br />

15 days = 13cm/5 in<br />

Currency:<br />

tögrög<br />

(pronounced “tugruk”)<br />

Photo: Bill Bilegsaikhan<br />

Dalanzadgad<br />

Airport (ZMDZ/DLZ)<br />

Located at an altitude of about<br />

1,470m/4,800 ft above sea level,<br />

Dalanzadgad Airport is just<br />

outside and northeast of the city<br />

of Dalanzadgad City, the capital<br />

of Umnugobi aimag (province).<br />

This airport handled about<br />

19,000 passengers in 2007, and<br />

boasts the second largest domestic<br />

passenger volume among<br />

Mongolian airports.<br />

Gurvan-Saikhan, as the airport<br />

is known locally, was founded<br />

in 1957 and moved into a new<br />

terminal in early 2007.<br />

Handling 60 passengers in an<br />

hour, the airport is equipped<br />

with modern telecommunication<br />

equipment and aircraft fueling<br />

with heating equipment<br />

and a GPU is available. The airport<br />

provides navigation services<br />

to several other airports in<br />

the area and most recently the<br />

Mongolian government has officially<br />

listed DLZ as an international<br />

airport. Last year, the<br />

new airport received one international<br />

flight. Future plans are<br />

being developed for immigration<br />

and border posts, as well as<br />

other services required for international<br />

flight handling.<br />

There is only one runway available<br />

at DLZ (030/210), formerly<br />

a grass covered surface, which<br />

has recently undergone major<br />

improvements including a fresh<br />

2,200 m/7,200 ft asphalt surface<br />

and a modern runway lighting<br />

system. During the summer<br />

season, DLZ makes very good<br />

use of the 14-16 hours of intense<br />

sunlight by collecting<br />

solar power to complement<br />

other forms of power.<br />

Improvements planned<br />

Initially, the DLZ airport offered<br />

only a small passenger terminal,<br />

with limited facilities for<br />

passenger services. But, with the<br />

increased activity surrounding<br />

the gold and copper mining<br />

prospects at nearby Khanbogd,<br />

and the need to further develop<br />

the tourism industry, the<br />

Mongolian Civil Aviation<br />

Authority (MCAA) built a new,<br />

more pleasing terminal and upgraded<br />

its equipment/runway.<br />

Dalanzadgad is a relatively industrialized<br />

town with well-developed<br />

infrastructure and<br />

approximately 17,000 inhabitants.<br />

There is a coal-fired powerplant,<br />

a publishing house, as<br />

well as candle and felt factories<br />

and wool-washing plants.<br />

Because of the number of<br />

tourists who visit the area, the<br />

town has various camps which<br />

engage many of the locals in the<br />

tourism industry.<br />

Eznis Airways, operating three<br />

<strong>Saab</strong> 340Bs (259, 297, 359) has<br />

scheduled service into and out<br />

of DLZ. During the fourth<br />

quarter of 2008, Eznis will offer<br />

daily flights to Ulaanbaatar (or<br />

Ulan Bator) which is Mongolia’s<br />

capital city and also its largest<br />

city. Air transportation is the<br />

most desired of all travel options,<br />

and another popular option,<br />

the motorcycle, is slowly<br />

replacing the camel and horse.<br />

Since Dalanzadgad is typically<br />

considered a starting place for<br />

the tourist’s route into the Gobi,<br />

scheduled service from the capital<br />

is welcomed, because the charters<br />

flights will generally arrive from<br />

Ulaanbaatar loaded with passengers,<br />

but return empty.<br />

The Gobi is not as sandy as one<br />

might suspect, but instead covered<br />

with bare rock. In comparison,<br />

Dalanzadgad provides the<br />

typical scenery associated with<br />

desert-like regions because the<br />

town is covered in 50 cm/20 in<br />

of sand.<br />

Fortunately, the town’s people<br />

believe that walking barefoot on<br />

the sand is good for the kidneys.<br />

Photo: Bill Bilegsaikhan<br />

Market Report | October 2008<br />

11


R<br />

<strong>MARKET</strong> <strong>REPORT</strong><br />

Operational status<br />

<strong>Saab</strong> 340<br />

414 aircraft in service<br />

60 operators in 31 countries<br />

13.1 million flight hours<br />

14.6 million flights<br />

<strong>Saab</strong> 2000<br />

58 aircraft in service<br />

13 operators in 11 countries<br />

1.1 million flight hours<br />

1.1 million flights<br />

SAAB 340<br />

SAAB 2000<br />

SAAB 340 & 2000<br />

(as of July 2008)<br />

Operator Country 340 2000<br />

Americas<br />

Operator Country 340 2000 Operator Country 340 2000<br />

Americas<br />

Europe & Africa<br />

AeroMexico Connect Mexico 5<br />

American Eagle USA 53<br />

Bimini Island Air USA 2<br />

Calm Air Canada 6<br />

Caribair Dominican Rep. 2<br />

Colgan Airways USA 40<br />

Corporate Express Canada 1<br />

FGI Associates USA 1<br />

Ginn Development USA 2<br />

Hendrick Motorsports USA 3<br />

IBC Airways USA 7<br />

JMJ Flight Services USA 1<br />

Joe Gibbs Racing USA 2<br />

Mesaba Airlines USA 49<br />

Murray Aviation USA 1<br />

Napleton Aviation Group USA 1<br />

Pacific Coastal Airlines Canada 8<br />

Pegasus Air Cayman Islands 1<br />

Peninsula Airways USA 10<br />

Prince Edward Air Canada 1<br />

Provincial Airlines Canada 2<br />

Saint-Ex Mexico 3<br />

SkyBahamas Bahamas 3<br />

SOL Argentina 3<br />

TAG Guatemala 1<br />

Transwest Air Canada 3<br />

Vigo Jet Mexico 1<br />

Western Air Bahamas 3<br />

Europe & Africa<br />

Air Express Sweden 3<br />

Airfast Congo 1<br />

Avion Express Lithuania 3<br />

Avitrans Nordic Sweden 13<br />

Carpatair Romania 12<br />

Central Connect Airlines Czech Republic 7<br />

CTK Network Aviation Ghana 2<br />

Darwin Airline Switzerland 4<br />

DOT Lithuania 2<br />

Eastern Airways Great Britain 6<br />

Estonian Air Regional Estonia 2<br />

Fleet Air Hungary 2<br />

flyLAL Lithuania 4<br />

Golden Air Sweden 9 4<br />

Kenya Airways Kenya 2<br />

Loganair Great Britain 16<br />

Mali Air Express Mali 2<br />

Mars RK Ukraine 2<br />

Moldavian Airlines Moldavian Rep 2<br />

NextJet Sweden 1<br />

Norse Air South Africa 5<br />

NRT Gabon 2<br />

OLT Germany 2 3<br />

Overland Airways Nigeria 1<br />

RAF-AVIA Latvia 2<br />

Robin Hood Aviation Austria 2<br />

Ryjet Spain 1<br />

SkyTaxi Poland 1<br />

Solinair Slovenia 3<br />

South Airlines Ukraine 2<br />

Sprint Air Poland 10<br />

Swedish Air Force Sweden 9<br />

Asia-Pacific<br />

Air Rarotonga Cook Islands 1<br />

Eznis Airways Mongolia 3<br />

Hokkaido Air System Japan 3<br />

Japan Air Commuter Japan 11<br />

Japan Civil Aviation Bureau Japan 2<br />

Japan Coast Guard Japan 4<br />

MacAir Australia 8<br />

Polet Airlines Russia 6<br />

Regional Express Australia 41<br />

www.saabaircraftleasing.com<br />

www.saabaircraft.com<br />

<strong>Saab</strong> <strong>Aircraft</strong> <strong>Leasing</strong>, Inc.<br />

21300 Ridgetop Circle<br />

Sterling, Virginia 20166, USA<br />

Tel: +1 703 406 7200<br />

Fax: +1 703 406 7224<br />

<strong>Saab</strong> <strong>Aircraft</strong> <strong>Leasing</strong><br />

Postal address:<br />

Box 7774, 103 96 Stockholm, Sweden<br />

Street address:<br />

Sveavägen 17, 11th Floor<br />

111 57 Stockholm, Sweden<br />

Tel: +46 8 463 1400<br />

Fax: +46 8 463 1409<br />

<strong>Saab</strong> <strong>Aircraft</strong> <strong>Leasing</strong><br />

4-7-13-205 Meguro<br />

Meguro-ku, Tokyo<br />

Japan 153-0063<br />

Tel: +81 3 3792 4300<br />

Fax: +81 3 3792 4315<br />

<strong>Saab</strong> Aerotech of America, LLC<br />

21300 Ridgetop Circle<br />

Sterling, Virginia 20166, USA<br />

Tel: +1 703 406 7200<br />

Fax: +1 703 406 7222<br />

<strong>Saab</strong> Aerotech<br />

SE-581 88 Linköping<br />

Sweden<br />

Tel: +46 13 18 00 00<br />

Fax: +46 13 18 51 15<br />

Market Report | October 2008

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