Aircraft and Aircraft Engines Held for Lease or Sale

9 Months Ended

Sep. 30, 2012

Aircraft and Aircraft Engines Held for Lease or Sale [Abstract]

Aircraft and Aircraft Engines Held for Lease or Sale

2.     Aircraft and Aircraft Engines Held for Lease or Sale

(a)Assets Held for Lease

At September 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:

	September 30, 2012					December 31, 2011
	Number		% of net			Number		% of net
Model	owned		book value			owned		book value
Bombardier Dash-8-300		9		26	%		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		5		5	%		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		-
General Electric CT7-9B engine		1		-

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

The Company did not purchase or sell any aircraft during the three months ended September 30, 2012. As discussed in Note 7, the Company sold one of its Fokker 50 aircraft in October 2012.

In July 2012, the Company delivered one of its off-lease Saab 340B aircraft to a current customer in South America, subject to a 48-month lease.

In July 2012, the Company signed a four-year lease for one of its off-lease Saab 340B aircraft with a carrier in the United States with delivery expected to occur in the fourth quarter of 2012.

At September30, 2012, twelve of the Company's assets, comprised of six Fokker 50 aircraft, three Saab 340B aircraft, two Fokker 100 aircraft and one General Electric CT7-9B engine were off lease. As discussed in Note 7, in October 2012, one of the Fokker 50 aircraft was sold. The Company is seeking re-lease opportunities for the other off-lease aircraft equipment, which represented 14% of the Company's aircraft net book value at September 30, 2012.

At September30, 2012, the Company had an allowance for doubtful accounts totaling $1,924,400 related to one customer for the amount owed in excess of 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. The final agreement has not yet been signed and no arrearage payments have been received.

(b)Assets Held for Sale

The airframe and one engine from one of the Company's Saab 340B aircraft have been reclassified to assets held for sale. The airframe will be sold pursuant to a consignment agreement executed with a maintenance vendor in October 2012. As discussed in Note 7, the engine was sold in October 2012. In October 2012, the Company and a current customer signed a letter of intent for a five-year lease of the second engine from this aircraft.