Addressing a persistently healthy market for both de Havilland Canada and Viking Twin Otters, North Carolina-based aircraft lessor and trader CAAMS aims to create a leasing portfolio of 100 of the rugged turboprops over the next decade. Long active in trading and leasing Twin Otters, mainly to airlines with interisland or remote-area operations, CAAMS has entered talks with a variety of potential investors regarding its planned Twin Otter leasing portfolio.

Potential investors include hedge funds, experienced lessors of used regional aircraft and “people in China,” according to CAAMS CEO Everette Mash.

The company’s portfolio initiative stems from the fact that many airlines effectively cannot replace their Twin Otters with comparable equipment, said Mash. Airlines account for more than two-thirds of the some 170 Twin Otter operators worldwide, according to CAAMS.

High demand continues to drive values upward for the STOL Twin Otter 300, an aircraft that cost $900,000 new in the mid-1970s. Today, “re-lifed” examples with engines overhauled to zero time sell for between $3 million and $3.5 million, Mash said.

Fully refurbished Twin Otter 300s, which rented for $25,000 per month three years ago, now lease for $35,000, even though several almost-new Viking Twin Otter 400s are available for purchase for $6 million or less, according to Mash. New Twin Otter 400s cost almost $7 million.

Most airlines—particularly interisland carriers operating in salt-water-laden environments—prefer Series 300 Twin Otters to Series 400s, Mash said. The Series 300 use PT6A-27 engines, for which non-corroding PMA parts are widely available, while no one produces non-corroding parts for the Series 400’s PT6A-34s, he explained. Therefore, in salt-water environments, time between overhauls for PT6A-27s exceed those of PT6A-34s.

Some 85 Twin Otters are for sale, many by oilfield operators hard-hit by tumbling oil prices. But Mash said many airlines cannot obtain financing to buy Twin Otter 300s because of their age—the youngest is 27 years old—and so must lease them.

CAAMS began building its Twin Otter leasing portfolio in January by purchasing three Twin Otter 300s from Puerto Rico-based Seaborne Airlines, which provided vendor financing for the buy. After refurbishing the three aircraft, ranging in age from 36 to over 40, CAAMS delivered one in September to an operator on the island of Biak in Indonesia’s Papua province.

A second—also planned for operation in Biak—sits at delivery specialist Southern Cross Aviation in McMinnville, Oregon, awaiting the outcome of Indonesian deliberations on importation of aging aircraft following the 10-fatality crash on October 2 of a 34-year-old Twin Otter 300 operated by domestic carrier Aviastar Mandiri.

Mash said CAAMS is now negotiating the purchases of another “five or six” Twin Otter 300s for the portfolio, but eventually it also will consider Series 400 aircraft.