South America is gaining increased attention as BAE Systems’ Regional Aircraft looks to secure new homes for is BAE 146/Avro RJ fleet.

Despite difficult market conditions, the company, which has 24 aircraft unassigned and several coming off lease this year, still reduced the number of unplaced aircraft over 2009 levels. Last year, the business placed 23 aircraft, in part driven by Indonesia and South African activities. Steve Doughty, head of sales, expects those markets to remain resilient.

BAE Systems is now also looking at how to ensure support to customers for the two growth areas of Indonesia and South America, says Sean McGovern, operations director of BAE Systems’ Regional Aircraft.

Moreover, Russia could offer potential this year, Doughty suggests, owing to delays in the Superjet 100 regional jet program. In particular, BAE Systems sees a chance in that area for RJ85s, which it didn’t have available for some time.

The company also will see some British Airways and Lufthansa regional jets coming off lease this year.

Market conditions remain difficult, stresses Rob Morris, vice president for marketing and analysis at BAE Systems Asset Management. Even though traffic should see growth this year, there are more than 1,000 new aircraft coming to the market. What’s more, he notes, last year saw aircraft utilization decrease 6%, so just by improving that rate, most of the traffic growth expected this year could be satisfied. “Indicators suggest that the capacity surplus won’t start to correct this year and that 2010 could potentially be as difficult as 2009.”

On the turboprop side, BAE Systems currently has no aircraft available and only a few coming off lease this year.

In addition, BAE Systems still is struggling with its cargo activity, and two cargo conversions have not yet found a home. The company will not pursue any further self-funded conversions and is hoping the cargo market will gradually rebound.

The company also has targeted firefighting as a potential market. So far only Minden Air has bought one aircraft for conversion for the role (with service entry next year), but Doughty suggests more business is in the works.

Business aviation also has been an area of emphasis. Three sales were secured last year.

The company also continues to push military applications, arguing in particular that for some roles, it makes more sense to use a regional jet to handle some troop transport or mail carrying rather than burning up more expensive C-130 hours. The company also hopes delays with the Airbus Military A400M may make a low-cost interim application attractive. Titan Airways currently uses a BAe 146 to fulfill a contract to provide logistics services for the U.K. defense ministry.

Photo credit: BAE Systems