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Rex buys out Saab 340B leases

written by australianaviation.com.au | April 10, 2014
Rex operates 51 Saab 340 (foreground) and 340B+ (background0 regional airliners.(Seth Jaworski)
Rex operates 51 Saab 340 (foreground) and 340B+ (background) regional airliners. (Seth Jaworski)

Regional Express (Rex) has announced it has purchased 18 Saab 340B+ aircraft which it been operating under a lease.

The airline says the aircraft were part of a group of 25 340s it had been operating on lease since 2006. It says the other seven aircraft had come off lease last July and had also been purchased by the airline.

The purchase means Rex now has a fleet of 51 Saab 340s, all of which it now owns. “Rex committed to leasing these aircraft in late 2006 as part of its fleet modernisation and expansion programme,” COO Garry Filmer said. “Upon lease expiry we had the opportunity of purchasing them at advantageous rates. With a remaining useful life of at least another 20 years, the Saab 340s with their low operating cost and fuel efficient engines will continue to provide sterling service on the Rex network.”

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12 Comments

  • Lucas

    says:

    Haha!! Another 20 years!!
    Some of these aircraft are pushing 30 years old.

  • Reverend

    says:

    the only small decent size aircraft is the ATR 72. Sadly their is no 20-30 seater aircraft made

    • australianaviation.com.au

      says:

      REX seems happy with the 340, but yes, there aren’t a lot of 18-36-seaters on the market. The Viking 400 and the RUAG Do-228 are about it, and they’re both optimised for STOL ops rather than efficient regional cruise speeds.
      Cheers
      Andrew

  • Jeff

    says:

    Lucas, it’s easy to be critical re the aircraft type, but I would be rather operating a fleet of fully owned aircraft than a fleet of aircraft that require lease payments in excess of $100K per month, particularly in the current climate. Owining the entire fleet is almost unheard of in aviation. Maybe this has a lot to do with Rex’s financial performance in comparison to practically every other airline in Australia at the morment. I think Rex’s conservative approach is to be admired in terms of sticking to their knitting in a space that the bigger guys are not able to make work.

    Jeff

  • Lucas

    says:

    Jeff, I agree that REX is in a good financial position at the moment… However these aircraft are only getting older, and with that an ever increasing maintenance bill. There’s already a shortage in spare parts for the Saab, hence why REX have gone out and bought all the spare parts that belonged to Pinacle airlines in the states. The Saab has been a excellent machine but it’s time to think long term.

    • australianaviation.com.au

      says:

      Lucas, what do you propose REX buys to replace the 340?
      Cheers
      Andrew

  • Stu Bee

    says:

    A wise move by REX, they can now manage load factor requirements to suit them – they can keep aircraft on the ground and not pay the leasing costs for inactive aircraft.

  • Rob

    says:

    The ATR42 is smaller than the ATR72 and it’s still in production.

  • Lucas

    says:

    Andrew, as Rob has pointed out the ATR 42 would be a great compliment to the Rex operation.

  • Bret

    says:

    ATR support is shocking with no real commitment by the manufacturer to support the region locally.
    REX’s move to purchase to keep the overall costs down plus the spares package will see them through the tuff times in the Australian market for years to come. True the fleet is aging but now they own them they have the ability to part-out/park as they see fit and until a suitable replacement comes along. ATR, maybe but this gap in the market is nothing new, watch this space.

    • australianaviation.com.au

      says:

      What do you base your comments about ATR on Bret?
      Manufacturers will usually only devote marketing resources to a region if airlines have active campaigns for a new/replacement aircraft. ATR had 2-3 sales people based in Sydney leading up to its Virgin/Skywest win, and has quite a large sales and support force based in Singapore who cover this region.
      Cheers
      Andrew

  • ian

    says:

    Jeff,

    A 340 is more like $30k/month not $100K unless on very short lease.

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