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April 18, 2024
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2015-02-03_11-04-20Bombardier secured an order with Chorus Aviation, which operates Jazz, a Canadian regional airline based in Halifax, for 13 Q400 aircraft with options for an additional 10.  These aircraft will operate under a capacity purchase agreement with Air Canada as Air Canada Regional.

Combined with an order for 5+10 Q400s from GE Capital on December 31st, the backlog for the Q400 is increasing again, after reaching low levels in 2013 that had analysts speculating on the future of the program.  Backlog for the program has now extended for more than 30 months at current production rates from orders in the last 12 months alone. And this excludes a Russian production deal currently stalled because of political issues.  If that 100 airplane deal survives the current political firestorm over the Ukraine, that would further solidify the program in the short term.

The new order means that Air Canada, WestJet and Porter will all be significant operators of the Q400 in Canada, where the speed of the Q400 provides a significant advantage over the competing ATR-72.

Two new variants for the Q400 were introduced last year, the 86 seat higher density version and the 50-seat Combi aimed at developing country markets, appear to have given some new momentum to the Q400 program.  Nonetheless, the Q400 remains behind ATR in sales and market share, with ATR having a lead in its native Europe and in Asian regional markets, which tend to be shorter distances than in North America, where the Q400 has an advantage.

The economics of the Q400 and ATR-72 are quite close, and depending on how the aircraft is operated. The larger and faster Q400 has higher costs per aircraft mile, but achieves lower seat mile costs with its higher density 86 seat configuration, as shown in the table below.

Chart1

The chart below provides a visual comparison of cost per aircraft mile between the Q400 and ATR-72.

Chart 2

The chart below provides a visual comparison of operating costs per seat-mile between the competing turboprops

Chart 3

The Q400 is a larger and faster aircraft than the ATR, and has a higher list price of $33.6 million versus $24.6 million.  When capital costs are added to the equation, the aircraft are very close economically.  The decision for an operator then comes down to mission and the requirement for speed.  For missions that require higher capacity or faster speeds, the Q400 has an advantage.  For those that do not, the ATR may be better suited.

Since 3 February 2014, Bombardier has gained 61 firm orders and 14 options for the Q400, which adds 30 months of backlog to the order book.  A program that once looked moribund is steadily resurrecting.

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President AirInsight Group LLC

6 thoughts on “Order from Chorus Aviation Continues Q400 Resurgence

  1. The lower the fuel price is the more attractive the Q400 becomes because of its speed and size. So the low fuel prices that we now see should favour the Q400 until the price of oil goes up again. But what would help the Q400 even more is if the selling price was lower. I cannot explain the huge price difference with the ATR which is manufactured in a country where labor costs are considerably higher than what they are in Canada.

  2. If CASM for the ATR is being assessed at the 31″ seat pitch option rather than the 29″ pitch, then it should for Q400 should as well. In which case it’s 68 seats vs 78 seats.

    Using Mr. Arvai’s numbers, that suggests the the ATR beats the Q400’s CASM on the shortest routes, but comes out ahead for stage lengths 200 miles and longer.

    Since Mr. Arvai’s wording seems to indicate he has not factored in capital costs to his CASM numbers: Assuming actual sales prices for both are 55% of list prices (as reports suggest is typical for Boeing and Airbus sales), spreading that cost very simplistically out over 50,000 airframe cycles works out to $99 extra capital cost per flight for the Q400. That pushes the crossover range to about 240 miles, assuming his CASM numbers do include maintenance and other operating costs.

    Still, based on the difference in sales, I find it hard to believe the real operating costs are that close. I root for the Q400, but if such a modest route length favors the more versatile aircraft economically, why isn’t it selling better?

  3. You are comparing a 68 seat to a 86 seat Q400, that is a 26% increase in capacity, the cash operating costs are hidden, and do not jive with my info on Q400, the Q400 burns 40% more fuel on short sectors (200nm) and 40% on longer routes (400nm) (+/-) and then add in the high maintenance costs of the PW150 vs the PW127, the numbers are not accurate, sorry.

  4. Alaska Airlines does very well with this type.

    Counting on the Russian connection is extremely dubious and unsure what the deal was or if it really benefited BBD

    Frankly I like the power for pure safety. ATR is pretty poor in that regard, it barely looks to pass the spec for single engine ops

  5. The largest seat capacity on Q400 is 80 seats – full economy for NOK airlines – and 72 for the ATR. The fuel/mile is comparable ATR 600kg/hr, 265NM/hr against Q400 1000kg/hr, 350NM/hr – 25% more for the Q400 but flying above the weather and faster. The game changer is that Airbus offers package deals for its airplanes with ATR, even more interesting than the prices mentioned.

    The choice indeed depends on the distances flown and the temperatures and altitudes of the airports. The ATR is limited in take-off weight, where the Q400 gets aways full load.

    The comments say more than the article.

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