Bombardier seeking ways to slash Q400 price tag

Washington DC
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Bombardier Aerospace is exploring options to reduce the price of the Q400 in an effort to make it more competitive in emerging markets.

The goal is to "narrow the (price) gap between an airplane that does less," Guy Hachey, president and chief operating officer of Bombardier Aerospace, said in a 21 March public meeting with investors and analysts.

The Q400 competes in the same market with the ATR 72-600, but the aircraft are significantly different. The Q400 is faster, quieter and roomier than the ATR 72-600, but is also more expensive. The list price of the Q400 is generally above $34 million, while the ATR 72-600 list price is about $23 million.

Bombardier does not want to lower its price artificially and "give the value away", Hachey says. Instead, the idea is to make the Q400 more affordable by reducing content on the aircraft. "Make it simpler and take the cost out," Hachey explains.

ATR capitalised on its cost advantage over Bombardier in the turboprop sector especially well in 2011. The Italian-French consortium compiled 156 orders that year, compared to seven for the Q400. Bombardier competed on a more even footing in 2012, winning a key deal with WestJet to supply up to 45 aircraft for start-up low-cost subsidiary Encore.

The Q400 competes best when the topography of a market requires longer stage lengths, allowing the aircraft's greater speed to offset its higher price tag. Bombardier is also pushing the Q400 in Russia, which shares with Canada a similarly vast geography.

But Hachey was silent on prospects for launching a stretched version of the Q400. Both ATR and Bombardier have been studying concepts for a 90-seat turboprop later this decade, but neither has publicly launched a development programme.

Indeed, Bombardier is likely headed in the opposite direction of launching a new development programme. Company officials at the investor event unveiled plans to slash research and development costs by half to $1 billion by 2015, leaving little room for launching new programmes on top of the CSeries, Global 7000/8000 and Learjet 85 already in development.