From the Cockpit with Jetstream Aviation Capital’s Stuart Klaskin

The regional freighter segment continues to see a growing demand for passenger-to-freighter conversions as express shipping to smaller cities continues to surge. Miami-based Jetstream Aviation Capital, a lessor of regional passenger and freighter aircraft and owner of the largest Saab 340 portfolio, remains committed to expanding its turboprop fleet inventory and investing in the regional market it has served since 2010. [caption id="attachment_56862640" align="alignright" width="450"] Jetstream Chief Executive Stuart Klaskin. (Photo/Jetstream Aviation Capital)[/caption] Cargo Facts caught up with Jetstream Chief Executive Stuart Klaskin to discuss the future of the company’s Saab 340 platform and its potential replacement. What follows is an edited version of the conversation. Cargo Facts : What is your view of the regional freighter market in 2023, and how has it changed since last year? Stuart Klaskin: We see the market both growing and maturing to a large extent. Historically, the market has been dominated by mid-size and smaller airplanes in the 3,000- to 7,000-pound weight capacity, with more focus on the smaller aircraft — single-pilot airplanes like the Beech 1900s, Beech 99s, Metroliners and others in that realm. What we’re seeing is a combination, and we’ve seen this now for a couple of years since the start of the pandemic. Operating mixed fleets has become more challenging for the smaller operators. Pilot availability and training issues are driving them toward fewer aircraft with greater capacity. We’re seeing a broader movement toward upgauging and we’re seeing movement to two-crew cockpits. It sounds a little counterintuitive at first, given pilot supply issues, but it allows the hiring of even less-experienced pilots to serve as co-pilots on the two-crew aircraft and then be trained really well in a multi-crew environment and gain experience in relative safety. Part of it is driven by pilot supply, aging aircraft and, quite frankly, a huge driver of this shift has just been this growth in next-day delivery requirements to smaller and mid-size cities. Amazon and the express integrators FedEx, UPS and DHL have fully transitioned to this express delivery model since COVID. This new role of the regional freighter has been the driving force behind the growth in the market. CF : Is it safe to say that there will be continued demand for the Saab 340F for the foreseeable future? How long do you anticipate this aircraft remaining in the regional sector? SK: The Saab is a really well-built aircraft designed for longevity. It’s a fairly simple airplane for a mid-size turboprop. The next closest competitor is the EMB 120. We also have some EMB 120 freighters, and I can tell you that clearly the Saab 340B/340B+ is the winner in that market. From a longevity and investment perspective, we forecast the airplane’s lifecycle to be roughly thirty-five to forty years. The majority of Saab 340Bs and Saab 340B+ models are now in the cargo market and most of them have been converted in the last two to three years. We see at least another ten to fifteen years of effective service life for the airplanes in a cargo environment. We will convert a dozen Saab 340 passenger airplanes to freighters this year, all of which are committed to customers. Given our forward contracts — not just the demand we’re seeing in the market but actual committed deliveries we have across the next eighteen months in our order book — we could convert another six or eight aircraft and can do eighteen this year and place them all. CF : What is a realistic assessment of feedstock availability for the Saab 340? SK: The feedstock in the market external to Jetstream is fairly thin. There are aircraft out there; there’s no question about that. Saab built roughly 450 of these airplanes. There are roughly 250 currently in service, between passenger and freighter planes. There’s a lot of active feedstock, and we own just under 100 units between the passenger and freighter Saab 340s. Most of them are productively engaged, flying early cargo converted in the hands of other owners and operators, or passenger service, and the unique thing about the Saab 340 from the freighter perspective is also one of the things that gives the aircraft a lot of longevity in the passenger market. There’s a bit of a tension now — and we feel it internally — between keeping aircraft in the passenger configuration and committing them to freighters because we have very strong demand on the passenger side. We have internal feedstock and own a big chunk of the former American Eagle fleet of aircraft we bought originally for part out. We’ve parted out one or two aircraft and converted a few freighters and put them back in service. We have another eight or nine of those that we could put back in service if we wanted to. So far, we’ve been doing this by buying active feedstock and putting those airplanes through conversion, but we’re going to start converting the American Eagle airplanes. The market, however, is very tight; we’re certainly seeing increasing pressure on pricing when you acquire aircraft and that’s translating to increasing pressure on lease pricing as well. CF : Do your discussions with clients indicate that growth in the e-commerce and express shipping sectors will remain consistent as the Saab 340 fortifies its niche in the market? SK: That’s what we see. It’s a very efficient airplane for what it does. Even if the airplane is not flying every day at maximum capacity, it is more broadly a profit creator for its operators and for the integrators that are putting cargo on these airplanes. The price point is relatively low, and operation costs are relatively low. It plays a really important role in the pilot development world right now, as a two-crew airplane does require a copilot, but you can put in there a co-pilot who’s relatively inexperienced and grow them in the role of a sub-captain quite easily. CF : When are you expecting redelivery of the first Saab 2000 freighter prototype? SK: I always caution people that the Saab 2000 is not just a stretched version of the Saab 340 by any means; it’s a very different airplane from a capabilities and performance perspective and in many ways. The first airplane test flew about three weeks ago, and the prototype conducted a successful flight. The next planned flights will test the LPV navigation and the cabin smoke evacuation with the European Union Aviation Safety Agency (EASA) personnel on board. We expect the first airplane to be certified by EASA by the middle of the second quarter. The real pacing item for us will be the U.S. Federal Aviation Administration (FAA) certification of the airplane based on the EASA certification, and we hope to get FAA approval in the summer. NyxAir in Estonia is our European launch customer, and they will take two. By the end of this year, we anticipate delivering three to four new Saab 200Fs. We’re getting a lot of interest in the airplane but really need to get it into the market and let the world see how it performs. One of the issues you have with a new development program is always: When is the airplane going to be certified? CF : Do you anticipate the Saab 2000 freighter’s life cycle to be similar to the current Saab 340, at ten to twelve years, or to exceed that? SK: They are younger airplanes. We tend to think of them having thirty-five to forty years of useful life, but because they all start later, they’ll finish later. So, we think the Saab 2000 still has fifteen to twenty years of useful life ahead of it. The challenge with the Saab 2000 is that there were not as many of them built, and a larger global fleet lends itself to greater longevity. We saw this as investors for a long time in Fokker 50 passenger and freighter airplanes, and one of the challenges you have is as the global fleet shrinks. And if the global fleet is small to begin with, at some point the economics of supporting a small fleet becomes very challenging. Right now there are thirty-five or forty Saab 2000s. We own most of them that are in service globally, and that’s pretty stable feedstock. We think there’s a market for about a dozen freighters out there that we can identify. It is a little bit more of a niche airplane than the Saab 340 given its payload capacity and range. The airplane indirectly competes with and is slightly superior in performance to some of the regional jets like the CRJ cargo conversion. The Saab 2000 provides identical speed, slightly better range performance, similar weight performance at a lower cost and is a really good development airplane for operators coming from the Saab 340 or the EMB 120. It’s an upgauge plane for those operators and it’s a really good downgauge airplane for operators coming out of the older freighters like the DC-9, Convair 580s and airplanes like that. Don’t miss our two upcoming events that are essential for stakeholders in Asia and Latin America: Cargo Facts Asia , taking place April 17-19 in Singapore, and Cargo Facts LATAM , taking place May 15-17 in Panama City. Register today.

From the Cockpit with Jetstream Aviation Capital’s Stuart Klaskin

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