February’s aircraft report: the Bombardier Dash8Q-400

London
Source: Flightglobal.com
This story is sourced from Flightglobal.com

The Bombardier Dash8Q-400 programme has now clocked more than 400 aircraft orders, including for the Next Generation version.

The Q400/400NG are offered in three passenger version with 70, 74 and 78 passenger aircraft but last year SATA Airlines took delivery of its aircraft in a high density 80 seat configuration.

The 414 mph (667 km/h) cruise speed is close to that of most regional jets and Bombardier has focused many campaigns on the low-cost markets. Not only does the Q400 possess all the benefits of jet speed productivity, it also sustains all the advantages of turboprop economics. Bombardier says the Q-400 has the lowest seat-mile operating costs. Compared to jets on typical 200 or 500 nautical mile segments, the Q400 burns substantially less fuel.

The first Q400s are heading towards the 40,000 cycles first structural check and would require like the other Q models a 1,000 hours inspection. Bombardier also changed the C-check intervals last year to 6,000 hours. The manufacturer extended the C1/2 checks from 4,000 to 6,000 hours but kept the C3/4 checks at 4,000.

The aircraft is being considered for a further stretched version (currently dubbed Q400X) to compete in the 90/100-seat market range. While plans for a stretched version of the Q400 appear relatively stagnant, Bombardier Commercial Aircraft president Gary Scott recently insisted the airframer remains committed to the Q400X concept: "Definitely a larger Q400 is in our future, it is just the matter of timing which is still to be determined. I think there is too much interest from our customers for us not to do it."

Previously a 2013-14 timeframe had been suggested and although a stretch version remains of "high interest" to existing and potential customers, Bombardier has not made any formal announcement.

ATR recently said that no announcement will be made in 2011 regarding a stretched version of the ATR72 model as the priority is the entry-into-service of the ATR-600 series.

Market

Last year Bombardier sold 43 Q400s compared to 16 aircraft in the fiscal year 2009/10.

"The rise in orders could be explained in part by the renewed current volatility of fuel prices. The aircraft's fuel efficiency makes it a very attractive product for regional airlines with low-density short-haul routes," comments IBA Group's Alice Gondry.

The Canadian manufacturer handed over 56 Q400s to customers during the period, five aircraft less than in the 2009/10 period, which also included some Q300 deliveries.

At 31 January 2011, Bombardier had sold 406 aircraft and delivered 344 to customers, leaving a backlog at 62 aircraft. Asia-Pacific and North America account for 45% each of future deliveries.

At 31 January 2011, there were 332 Q400s in operations with 44 customers, according to Flight's ACAS database. About 158 aircraft are owned by operators, 157 are leased while the remaining 17 aircraft are subleased. The average age fleet is 4.26 years.

Europe represented 147 aircraft or 44% of the Q400 market share, while North America accounted for 101 aircraft, or another 30.5%.

There are 54 aircraft in operation in Asia-Pacific, or 16% of the Q400 market share. Africa and the Middle East account for another 26 aircraft, or 8% of total aircraft fleet. The remaining four aircraft are operated in South America.

Bombardier's latest 20-year forecast predicts 2,400 aircraft deliveries in the turboprop market.

Between 2010 and 2029, Bombardier's commercial aircraft market forecast anticipates a demand of 100 aircraft in the 20 to 59-seat aircraft segment.

In the 60 to 99-seat aircraft segment, the manufacturer expects demand for 2,300 turboprops.

New markets

Flybe is the largest Q400 operator with 56 aircraft, but the UK low-fare carrier's fleet has been subject to many changes over the past few years. Flybe entered into a 12-month wetlease contract with Greece's Olympic Air for four aircraft, sold two aircraft and also entered a sublease agreement with Wideroe. The UK carrier is returning two SAS aircraft in April this year while the first turboprops on 10-year operating leases are being released this autumn.

Porter Airlines has developed into a strong Q400 operator over the past two years and now has 20 aircraft of the type. Last year it ordered four more aircraft and took options on another six.

The Q400 passenger is still a popular programme for Bombardier and in 2010, the Canadian manufacturer opened new markets notably in India. The SpiceJet's 15 Q400 NextGen firm order and the 15 options are significant for Bombardier as the Canadian manufacturer's only presence in India had been through six CRJ200s and one Dash6-300 aircraft. In the turboprop market, Indian carriers operate 54 ATR 42/72 and backlog is estimated at 41 aircraft.

SpiceJet, says it evaluated all aircraft in the 60- to 80-seat category and selected the Q400 NextGen model as it increase the reach to over 60 airports that "could not be served by the larger jets."

Bombardier is also penetrating the South American market with Aires. The Columbian carrier acquired four 2005-vintage Q400s from Jeju Air last year and later sealed a deal with Nordic Aviation Capital for the sale and leaseback. It also announced that it plans to replace its entire fleet of 11 Dash8Q-200s with larger Q400s over the next five years.

Bombardier is expected to consolidate its market presence in Africa this year. CAO understands that Flybe's remaining slots are being sold to South African Express.

Cargo role

The Dash8-Q400 fleet is mainly passenger application, but Bombardier has sold a few multi-role aircraft including aerial fire fighting as an airtanker. In addition, Swedish cargo operator Nord-Flyg launched a freighter conversion programme in 2008 with Cascade Aerospace and converted a 1999-vintage aircraft in E-Class bulk compartment and will put a 9g rigid vertical net. Nord-Flyg filed for bankruptcy last April and returned its two Q400s - only one of which had been converted to a freighter - to SG Finans AS Norge leasing entity. European cargo operator, West Atlantic announced the lease of the converted aircraft last autumn. West Atlantic operates a fleet of more than 50 aircraft, including 43 British Aerospace ATP freighter aircraft.

For the time being the Q400 cargo application is not expected to develop although Bombardier says there is a potential market there, albeit not a large market.

Market activities

Nordic Aviation Capital (NAC) has developed into a major leasing company for turboprops over the past few years and it further increased its Q400 presence in 2010.

Last year, the lessor grew its Q400 portfolio through sale and leaseback with Air Berlin's co-operation partner Luftfahrtgesellschaft Walter (three 2009-vintage aircraft), Aires (four 2005-vintage aircraft), Flybe (four 2009-vintage aircraft). It also purchased a 2005-vintage ex-ANA Wings aircraft from Bombardier.

In 2010, Blue Bird Aviation purchased a 2001-vintage aircraft from SAS and now owns three ex-SAS Commuter Q400s.

Air Canada is taking five ex-Lynx Aviation Q400s on seven years leases after concluding a capacity purchase agreement with Sky Regional Airlines. The regional carrier will sublease the Q400 fleet from Air Canada for operations out of the Billy Bishop Toronto City airport.

Another two Lynx Aviation aircraft have been leased to Horizon Air for short-term periods, while some aircraft are about to be placed.

Values and lease rates

Availability Q400 aircraft is limited to a couple of aircraft.

Lease rates are believed to be between $120,000 a month and up to $200,000 at the top end. Most of the transactions have been in the $140,000 range but CAO understands that some 2007-vintage aircraft have been placed in the $185,000 range.

Avitas says monthly lease rates range from $70,000 to $180,000. IBA Group says a 2000-build aircraft would lease for $123,000 a month, while a 2004-vintage aircraft's lease rate is in the $140,000 range. A four-year old aircraft would lease in the $155,000 range.

Collateral Verifications' lease rates are $140,000 at the lower end, $155,000 for a 10-year old aircraft, $170,000 for a 2004-vintage aircraft and $192,500 for a 2007-vintage. Collateral Verifications sees newer aircraft leasing for $215,000 a month.

The sale activity has been centered on the SAS' 24-aircraft non-Next Gen fleet, which has been contracted but some are yet to be delivered. In the past, some aircraft have been sold for between $11.5 million and mid-$13 million, depending on the vintage and number of cycles/hours. "SAS removing its fleet of Q400 aircraft from service has had little incidence on the aircraft market, as the aircraft found placement with relative ease," says Gondry.

Avitas values a 2001-vintage aircraft at $8.9 million, while IBA Group says the current market value (CMV) is $10.1 million. MBA's CMV on the 2001-vintage aircraft is $9.85 million, up from its $9.43 million base value. Collateral Verifications' CMV is $10.8 million.

A 1998-vintage is valued at $9 million by Collateral Verifications, $7.4 million by MBA and $6.3 million by Avitas.

Avitas values a 2004-vintage aircraft at $11.5 million. IBA Group's CMV is $12.2 million, Collateral Verifications' CMV is $12.9 million, while MBA's CMV is $13 million.

Interestingly MBA is of the opinion that current market value is below than base value, while IBA thinks the opposite.

A 2007-vintage aircraft would command a CMV of $16.8 million for Collateral Verifications, $14.9 million for Avitas, $15 million for IBA and $16.5 million for MBA.

If sold a 2010-build aircraft is valued at $21.7 million for Collateral Verifications, $19 million for Avitas, $18 million for IBA and $19.5 million for MBA.

"In the last 12 months, Collateral Verifications has seen values remain stable for the type with lease rentals rebounding by about 10% due to the lack of availability. With the beginning of a potential recovery for the industry and the continued volatility of fuel prices, we feel that these numbers will most likely remain stable for the next 6-12 months with a potential for further improvements thereafter," comment Collateral Verifications' Gueric Dechavanne.