BAE SYSTEMS2004-02-02 12:54:37


Latest deal ends a strong year for Regional Aircraft portfolio transactions.

BAE SYSTEMS Regional Aircraft has signed a major lease extension programme with German carrier Eurowings Luftverkehrs AG covering five BAe 146s (four Series 300 and one Series 200) operated by the airline.

Eurowings has successfully operated BAe 146 passenger jets for almost ten years on a range of international and domestic routes. The airline is now part of the new Lufthansa Regional concept and Eurowings has decided that the BAe 146 continues to be an ideal fit for their fleet planning.

Peter Kranich, Senior Vice President, Accountable Manager for Eurowings said today: " We are delighted to have extended the leases on these BAe 146 aircraft. As we assimilate our operations into that of Lufthansa Regional we find that the BAe 146 is the right size aircraft with good economics for our operations. We like its flexibility and its reliability and our passengers love the wide, comfortable cabin.�

The Eurowings contract, which was signed at the end of 2003, means that a total of 76 portfolio aircraft were transacted during the year, some 21% of the total.

Most of these transactions were for new leases and lease extensions and covered 42 BAe 146/Avro RJs, six ATPs and 28 Jetstream 31/32s, with a transaction value of over $150 million.

Paul Stirling, Senior Vice President Asset Management commenting on this performance said today: "The Asset Management teams of Regional Aircraft turned in an excellent performance during 2003. Despite a difficult market in the regional sector there were some major positives for us. The retention by Lufthansa of the RJ85 fleet coupled with the Eurowings lease extensions is further evidence that in the intensely competitive 70-100 seat market, a clear option for many carriers is to stay with the product they know.

"We believe that airlines are reflecting on the fact that new-generation equipment often is not going to deliver any better performance or comfort and amenity, and that the reported lower operating costs are offset heavily by the much higher price and lease cost tag.

" 2003 also marked the successful conclusion of the Blue 1 (Air Botnia) Avro RJ transaction and the breakthrough by the ATP into Asian Spirit, which is important as we aggressively seek new market opportunities for our lease portfolio.�

For more information contact:
Warwick House
Po Box 87
Farnborough Aerospace Centre
GU14 6YU
United Kingdom
Tel:     + 44 1252 373232
Fax:     + 44 1252 383000



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