Final Three Avro RJs To Be Delivered Under 2005 Deal

BAE Systems Regional Aircraft has signed contracts with the Belgian major carrier Brussels Airlines for the sale and leaseback of three Avro RJs operated by the airline.

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 that 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.

BAE believes the Brussels Airlines deal -- as well as similar lease extensions signed with other carriers operating Avro RJs -- help shore up the model's appeal to airlines at a time when most major carriers are shunning smaller regional jets, due to high operating costs offset by lower revenue potential.

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.

FMI: www.baesystems.com, www.brusselsairlines.com