Aircraft and Aircraft Engines Held for Lease

6 Months Ended

Jun. 30, 2012

Aircraft and Aircraft Engines Held for Lease [Abstract]

Aircraft and Aircraft Engines Held for Lease

2.     Aircraft and Aircraft Engines Held for Lease

At June 30, 2012 and December 31, 2011, the Company's aircraft and aircraft engines, which were on lease or held for lease, consisted of the following.   

	June30, 2012					December 31, 2011
	Number		% of net			Number		% of net
Model	owned		book value			owned		book value
Bombardier Dash-8-300		9		25	%		8		23	%
Fokker 100		7		23	%		7		28	%
Bombardier Dash-8-Q400		3		19	%		1		8	%
Fokker 50		14		15	%		14		18	%
General Electric CF34-8E5 engine		3		7	%		3		8	%
Saab 340B		6		6	%		6		6	%
Saab 340B Plus		2		3	%		2		4	%
deHavilland DHC-8-100		1		1	%		2		4	%
deHavilland DHC-6		1		1	%		1		1	%
Saab 340A		1		-			1		-

Net book value at June 30, 2012 and December 31, 2011 excludes the Company's Saab 340A aircraft, which is subject to a finance lease.

During the three months ended June 30, 2012, the Company purchased two Bombardier Dash-8-Q400 aircraft on lease to a current customer in Africa, with lease terms expiring in June 2017.   During the same period, the Company sold a deHavilland DHC-8-100 aircraft and recorded a gain of approximately $873,500.  Although the Company executed a purchase agreement in May 2012 to sell another of the Company's deHavilland DHC-8-100 aircraft upon the scheduled expiration of the lease of the aircraft, the current lessee of that aircraft has failed to return the aircraft to the Company.  As a result, in July 2012, the Company and the buyer terminated the purchase agreement in July 2012.

In April 2012, one of the Company's Saab 340B aircraft was returned to the Company at lease expiration, pursuant to the return conditions of the lease.  

In April 2012, the Company and one of its customers in the Caribbean signed a lease for one of the Company's off-lease Fokker 100 aircraft.  The aircraft was delivered in May 2012 and is subject to a 36-month lease.  

In April 2012, the lessee of four of the Company's Saab 340B aircraft declared bankruptcy, rejected the leases for the aircraft and returned them to the Company.  In May 2012, another customer, which leased six of the Company's Fokker 50 aircraft, declared bankruptcy and subsequently returned the aircraft to the Company.  In connection with the second bankruptcy, the Company recorded a bad debt expense of $310,300.

At June30, 2012, fourteen of the Company's assets, comprised of six Fokker 50 aircraft, six Saab 340B aircraft and two Fokker 100 aircraft, were off lease.  As discussed in Note 7, one of the Saab 340B aircraft was delivered to an existing customer in July 2012.  The Company is seeking re-lease opportunities for the other off-lease aircraft, which represented 17% of the Company's aircraft net book value at June 30, 2012.

At June30, 2012, the Company had an allowance for doubtful accounts totaling $1,924,400 related to one customer for the amounts owed in excess of payments received and the security deposits held by the Company.  In early 2012, the Company and the customer signed a memorandum of understanding regarding the arrearages owed to the Company.  The memorandum of understanding specifies that the customer will pay $1,270,000 of the arrearages over three years, with the balance forgiven upon receipt of all payments due under the agreement. Since collectability of this receivable is not reasonably assured, the Company will record these payments as revenue on a cash basis when received.