BAE Systems Behind New T-Prop Lease Venture

BAE Systems has leased 10 Jetstream 32EPs to Corporate Aircraft Partners, an Atlanta-based company that aims to fill a gap in the aircraft management/leasing market.

CAP's concept? Provide companies with on demand air travel within an 800-mile radius of their home city, in the form of turboprop aircraft with luxury, 10- to 12-seat interiors and hookups for laptop computers.

"We believe this gives us an edge not only over the scheduled carriers, but over the fractional providers as well," said industry veteran Rolly Bergeson, CAP's chief. "Our service requires a much lower initial cost infusion that's entirely deductible, with no worries over residual aircraft value."

Operations will commence with four aircraft once CAP receives its FAR Part 135 certification, which is expected by October 18. Bergeson hopes to have 16 aircraft in service by the end of 2001, with deliveries planned at the rate of one aircraft per month.

Bergeson says Part 135 certification is needed, because "you can't sell portions of a lease without it." No customers have signed as yet, but a direct mail marketing campaign has generated a great deal of interest.

The target market is corporations with an annual travel budget of $150,000 or more. Tom Keough, CAP's marketing VP, said the major selling point is the offering of two-year terms, "at prices well below the fractional providers."

BAE Systems retains a "minor equity interest" in the venture, seeing it as a unique and different way to market the used turboprops in its "Asset Management" fleet. BAE systems also is paying for the conversion work on the first batch of aircraft, underway now in Mena, AR.

"Having BAE Systems as a partner tells us that we'll have the support we need," Keough adds.

Out of 260 BAE Systems turboprops in the U.S., corporate operators fly around 30 J31s and J32s, including five aircraft used for NASCAR race teams.

By Paul Richfield