Resurgence for ERJ-145

Discussion

Inexpensive airplanes

In unusual fleet decisions, Piedmont and CommutAir are adding scores of ERJ-145LRs to their fleets.

Piedmont’s ERJ-145LRs are 1998-2004 vintage. The average year of manufacturer of the CommutAir ERI-145LRs is 2006. Delivery is through 2018.

According to the appraisal firm Aviation Specialists, the current market value of 1998-2004 aircraft is $1.5m to $2.4m.

CMV for a 2006 ERJ-145LR is $2.9m, the company’s appraisal book The Guide indicates.

Typical lease rates are in the $40,000-$50,000/mo range, Aviation Specialists says. On top of this are Power By the Hour fees for maintenance reserves for engines, landing gear and other critical components.

“The 145LR and 145XR are the most fuel efficient of the 145s,” says Joel Hussey, president of Tradewind Capital, a boutique aircraft advisory firm that remarkets regional jets. Tradewind was not involved in the Piedmont or CommutAir deals.

Cheap prices for the 145s and low fuel costs literally have given the aircraft a new lease on life, he said.

Two years ago: scrap

Piedmond is leasing its aircraft from American Airlines’ Envoy regional airline, which owns them via American Leasing. CommutAir declined to identify the lessor(s) of its aircraft.

CommutAir is replacing Bombardier Dash 8-200/300 turboprops with the ERJs, as is Piedmont.

“Regional airlines are making fleet decisions with 50-seat jets that two years ago were headed toward the boneyard,” Hussey said.

“The current market value of regional jets in the last two years was scrap. These are unusual deals,” Hussey says. “There were deals in ones, twos and threes as opposed to a fleet move.”

Values for CRJ-200s were in the engines. Values for the ERJs, with Rolls-Royce-Allison engines, were in the tear-down.

Nearly all engines on ERJs were under PBH agreements with Rolls-Royce, thereby controlling the market and making a valuation of the engines difficult, Hussey said.

Soft CRJ Market

Hussey said there is little demand for the CRJ-200, the competitor to the ERJ-145. At the end of last year, there were more than 200 CRJ-200s, about 27% of all the -200s produced, and another 50 of the older CRJ-100 50-seaters in storage.

As of this month, there are 160 ERJ-145s in storage, according to the Ascend data base. This is about 23 of all those produced.

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