Industry backs Q400 despite SAS withdrawal

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Industry confidence is high that the resurgence in demand for turboprops will continue unabated and that residual values for Bombardier's Q400 will remain robust despite SAS Group's plans to dispose of its entire Q400 fleet following a third gear-related landing incident.

On 27 October a Scandinavian Airlines Q400 landed in Copenhagen with its right man gear partially extended. This was preceded by gear collapses involving Scandinavian Q400s at Aalborg, in Denmark, and Vilnius, Lithuania on 9 and 12 September - events that prompted Transport Canada to issue an airworthiness directive calling for Q400 operators to conduct immediate landing-gear inspections. Corroded retraction actuators, which had then disconnected, were found on the Q400s involved in the earlier accidents.

In a finding that supports Bombardier's claim that the latest incident in Copenhagen was unconnected to the previous two events, Danish investigation authority HCL discovered that a blockage in a retraction actuator prevented the right-hand landing gear extending. The actuator was found to be intact and still connected to the undercarriage. "The retraction/extension actuator restrictor valve was blocked with an O-Ring. This O-Ring did not come from the actuator and its source is unknown," says HCL.

Bombardier says a probe conducted in consultation with Transport Canada in the wake of this event "did not identify a systemic landing-gear issue", while its review with Goodrich confirms the operational integrity of the landing-gear system.

Nonetheless, SAS - the original launch customer for the Q400 - is axing its entire Q400 fleet, including 23 flown by Scandinavian Airlines and the remainder by Widerøe in Norway, after heavily criticising the turboprop's reliability and becoming increasingly concerned over the effect on passenger confidence. All but one of SAS's Q400 turboprops is leased, according to Flight's ACAS database. The aircraft range in age from five to eight years old.

The Scandinavian group's lack of confidence is not necessarily shared by industry players. "I think most people in the industry see this as something going on with SAS that we still need to better understand, and all other operators seem to be doing fine with the airplane," says Saab Aircraft Leasing president and chief executive Michael Magnusson.

Q400 operators, including UK regional carrier Flybe, Austrian Arrows and North American operator Horizon Air, have publicly reaffirmed their faith in the aircraft. "We have operated Q400s since 2001 in the western USA and Canada and we've never experienced any issues like what SAS [Group] has in Europe," says Horizon.

Also standing by the type is Qantas, Japan Airlines and, notably, Japan's All Nippon Airways, which suffered an incident on 13 March in which one of its Q400s landed at Kochi airport with a retracted nose gear.

Even if a glut of ex-SAS Q400s is released into the market, it seems unlikely to have a long-term impact on residual values. "There may be a short-term hit in terms of acquisition price, but I suspect it will be minimal and short-lived," says Douglas Abbey, managing partner at aviation consultancy The Velocity Group.

Saab's Magnusson agrees, saying that "the demand for used turboprops is so strong at the moment that the market will absorb them fairly quickly".

There are 160 Q400s in operation around the world, and a further 100 on backlog. Sources in the leasing and analyst communities have identified German low-cost carrier Air Berlin as the anonymous Q400 customer that recently ordered 10 aircraft.

These commitments "clearly support our forecast for steady and sustained growth on the Q400", says Bombardier.

The company continues to study a potential stretch version of the Q400 turboprop, dubbed the Q400X. Any movement on this front, however, will not be driven by the SAS situation. "It's a separate consideration that really addresses a market need," says Bombardier.