Aircraft and Aircraft Engines Held for Lease or Sale

12 Months Ended

Dec. 31, 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 December 31, 2013 and December 31, 2012, the Company’s aircraft and aircraft engines, which were on lease or held for lease, consisted of the following:   

	December 31, 2013					December 31, 2012
	Number		% of net			Number		% of net
Model	owned		book value			owned		book value
Bombardier Dash-8-300		9		23	%		9		25	%
Fokker 100		7		19	%		7		22	%
Bombardier Dash-8-Q400		3		17	%		3		19	%
Bombardier CRJ-705		1		12	%		-		-
Fokker 50		10		10	%		13		14	%
Saab 340B Plus		6		8	%		4		6	%
General Electric CF34-8E5 engine		3		6	%		3		7	%
Saab 340B		4		4	%		5		5	%
Tay 650-15 engine		1		1	%		-		-
General Electric CT7-9B engine		2		-			1		-
Saab 340A		1		-			1		-
deHavilland DHC-8-100		-		-			1		1	%
deHavilland DHC-6		-		-			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 2013 and 2012, the Company used cash of $24,965,500 and $30,632,200 for the purchase and capital improvement of aircraft.

During 2013, the Company recorded gains totaling $4,504,200 related to the sale of three Fokker 50 aircraft, a deHavilland DHC-8-100 aircraft, a deHavilland DHC-6 aircraft and a General Electric CT7-9B engine. The Company also leased an engine pursuant to a finance lease and recorded a related gain of $73,300.  In addition, the Company recorded a loss of $769,300 on the disposal of a Tay 650-15 engine, which was replaced by one of the Company’s spare engines.

During 2012, the Company recorded gains totaling $1,373,800 related to the sale of a Bombardier Dash-8-100, a Fokker 50 aircraft and a General Electric CT7-9B engine.  The Company also leased an engine pursuant to a finance lease and recorded a related gain of $112,300.  

During 2013, the Company extended the leases for eight of its assets and leased three assets that had been off lease at December 31, 2012.

In August 2013, the lessee of three of the Company’s Fokker 100 aircraft was declared bankrupt and the lessee returned the aircraft to the Company. In connection with the bankruptcy, the Company recorded a bad debt expense of $357,600.

At December 31, 2013, thirteen of the Company’s assets, comprised of four Fokker 50 aircraft, one Saab 340B aircraft, six Fokker 100 aircraft, one General Electric CF34-8E5 engine and one Tay 650-15 engine, which represented 23% of the net book value of the Company’s aircraft and engines, were off lease.

As discussed in Note 12, the Company sold a Fokker 50 aircraft in March 2014.  The Company is seeking re-lease opportunities for the other off-lease assets, other than the Tay 650-15 engine that is being held as a spare and used in connection with required maintenance on the Company’s Fokker 100 aircraft.

(b)Assets Held for Sale

During 2012, the Company classified the airframe and one engine from one of the Company’s aircraft as held for sale.  The engine was sold during 2012 at a gain of $50,900.   During 2013, the Company classified an additional airframe and engine from another aircraft as held for sale, and sold the engine during the year, generating a gain of $6,600.  During 2013 and 2012, the Company received $495,100 and $0 from the sale of parts belonging to the two airframes.  No adjustments to the carrying value of the Company’s assets held for sale were recorded during 2013 and 2012.