BAE Systems and Brussels Airlines Sign New AVRO RJ Sale and Leaseback Deal

Released on Monday, July 14, 2008
Avro RJ
Farnborough, UK - BAE Systems has signed contracts with the Belgian major carrier Brussels Airlines for the sale and leaseback of three Avro RJs.

This deal follows the major transaction concluded in May 2005 under which BAE Systems signed a contract to buy and then leaseback 23 of the airline's fleet of 26 Avro RJ85/100s. That deal required BAE Systems to acquire the aircraft in stages over a five- year period.

This new transaction covers the final three Avro RJ100s which were the last aircraft to be delivered to the airline in 1999 and were the subject of a separate financing structure, which meant both parties elected to handle these aircraft separately.

To date BAE Systems has bought back and re-leased 17 of the original 23 aircraft. The remaining six aircraft will follow this year and in 2009. The three aircraft under the new deal also will be acquired during 2009 and immediately leased back to the airline. This further deal means that the Avro RJ will remain a core part of the Brussels Airlines fleet until at least the middle of the next decade.

During this year BAE Systems has also concluded Avro RJ lease extensions with Malmö Aviation in Sweden and Blue1 in Finland to add to the deals concluded recently with BA CityFlyer and CityJet of Ireland. All of these transactions show that the Avro RJ will retain a strong European mainline carrier presence for many years to come.

A number of large airlines have taken the view that new regional jets offer only marginal improvement over modern used regional jets - and in some cases less operational capability - but entail considerable significant risk in terms of financial exposure and commitment period. This is at a time of considerable market uncertainty, especially in the regional sector with the strong competition from the low-cost carriers.

The Avro RJ is the backbone of the Brussels Airlines regional fleet that, together with a number of BAe 146s, service an extensive European network linking the important Brussels hub with some 55 destinations in 19 countries. The airline has also deployed some of its BAe 146 fleet into a new Congolese joint venture carrier, Air DC, which is based at Kinshasa. This new airline is operating a feeder service from 10 domestic and African regional destinations into Brussels Airlines' long-haul routes into the Belgian capital.


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