Aircraft and Aircraft Engines Held for Lease or Sale

6 Months Ended

Jun. 30, 2013

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 June 30, 2013 and December 31, 2012, the Company's aircraft and aircraft engines, which were on lease or held for lease consisted of the following:  

	June 30, 2013		December 31, 2012
	Number	% of net	Number	% of net
Model	owned	book value	owned	book value
Bombardier Dash-8-300	9	25%	9	25%
Fokker 100	7	22%	7	22%
Bombardier Dash-8-Q400	3	19%	3	19%
Fokker 50	12	13%	13	14%
General Electric CF34-8E5 engine	3	7%	3	7%
Saab 340B	4	4%	5	5%
Saab 340B Plus	5	8%	4	6%
deHavilland DHC-8-100	-	-	1	1%
deHavilland DHC-6	1	1%	1	1%
Tay 650-15 engine	2	1%	-	-
General Electric CT7-9B engine	2	-	1	-
Saab 340A	1	-	1	-

Net book value excludes the Company's Saab 340A aircraft and the two General Electric CT7-9B engines, which are subject to finance leases.

During the second quarter of 2013, the Company purchased a Saab 340B Plus aircraft on lease to an existing customer in Thailand, with a lease term expiring in the fourth quarter of 2017.  The Company also delivered a General Electric CT7-9B engine to the same customer, with a finance lease expiring in the second quarter of 2017.  During the second quarter of 2013, the Company used cash of $2,323,000 for the purchase and capital improvement of aircraft.

In February 2013, the Company and the lessee for one of the Company's aircraft reached a settlement in connection with litigation initiated by the lessee in 2012 regarding the return of the aircraft.  Pursuant to the settlement, the Company and the lessee agreed to a sale of the aircraft to the lessee.  The sale closed in June 2013, and the Company recognized a gain of $1,871,000.

During the second quarter of 2013, the Company extended the lease for its deHavilland DHC-6 aircraft.  

At June 30, 2013, fourteen of the Company's assets, comprised of five Fokker 50 aircraft, three Saab 340B aircraft, four Fokker 100 aircraft and two Tay 650-15 engines, which represented 23% of the net book value of the Company's aircraft and engines, were off lease.  In July 2013, the Company sold one of its off-lease Fokker 50 aircraft, re-leased one of its off-lease Saab 340B aircraft for a term of four years and signed a lease for one of its off-lease Fokker 100 aircraft. Except for the two Tay 650-15 engines, the Company is seeking re-lease opportunities for the other off-lease assets.  The Tay 650-15 engines, which were acquired during the first quarter of 2013, are held as spares and used in connection with required maintenance on the Company's Fokker 100 aircraft.

 (b)  Assets Held for Sale

Assets held for sale are carried at their estimated fair values, less costs to sell. At June 30, 2013, such assets consisted of two Saab 340B airframes and one General Electric CT7-9B engine.  The various components of the airframes are in the process of being sold pursuant to consignment agreements executed with a maintenance vendor.  During the second quarter of 2013, the Company realized $171,700 of proceeds from sales of airframe parts.  The Company is seeking sales opportunities for the engine. No adjustments to the carrying value of the Company's assets held for sale were recorded during the three months or six months ended June 30, 2013 and 2012.