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May 27, 2024
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We believe that a mix of high speed turboprops and jets in the 70-90 seat sector are the most likely 50-seat regional jet replacements, but we see a resurgence of turboprops taking a larger market share in today’s high fuel cost environment.  Today’s best selling turboprops are in the 70-seat range, and both major manufacturers are examining 90 seat turboprops to support regional markets in the future.

This chart demonstrates the resurgence in turboprops at the same time we see a relative decline in regional jet sales.  Fewer regional jets are being sold, but these are typically nearly double the size of the previous generation, so the drop is seat count is not as severe.

The turboprop market is growing again.  From 2009 to 2011 orders more than doubled. The reason appears to be fuel price.  The following charts illustrate the correlation between fuel prices and turboprop orders. With currently high fuel prices projected for 2012, it should be another good year for turboprops.

The Market Today
Where are turboprops being sold today, and what are the current market trends?  It appears that each manufacturer has developed its own market niche, geographically and by type of airline.  Let’s examine their customer bases, geographic presence, and types of customer to understand why airlines of various types are choosing turboprops for their operations.

Recent demand for turboprops has been driven primarily by emerging markets.  ATR had a very good 2011, with 157 sales (net of 119 cancellations plus 79 options).   ATR noted that in 2011 it acquired 10 new customers who were replacing earlier generation turboprops.  Bombardier sold only seven Q400s last year, in what we believe is a reflection of a sales department in transition during the restructuring by the new sales chief, Chet Fuller. Bombardier is off to a better start this year.  EuroLOT put in a firm order for eight Q400s plus 12 options. This order is important because these Q400s are set to replace ATR72s at the airline.  Bombardier also won the crucial race at WestJet. ATR and Bombardier are facing off at Garuda, the former a potential order for up to 40 aircraft.

ATR is more focused on Asia and saw strong demand in 2011 from the region, as the next chart illustrates.  Looking forward, we see that based on current orders, ATR remains Asia focused.

Bombardier, on the other hand, is more EU and North America focused as the chart illustrates.

Taking a look at the regional breakdown side by side we can clearly see where each OEM is focused.

Since 2000 Bombardier has delivered 386 Q400s and ATR has delivered 314 ATR72s. But ATR has a larger customer base as is shown the next chart while Bombardier has fewer but larger customers.

We believe the customer size and route structure has influenced the choice of aircraft. The Q400 has higher penetration with network airlines than the ATR, which may be a factor of aircraft speed. The additional speed provides a larger feeder radius around a hub enabling longer feeder spokes routes and operational flexibility.

AirInsight’s independent analysis of the competitive economics between the ATR72 and Q400 demonstrate how close the two alternatives for airlines really are.  The following chart clearly shows the relative economic strength of turboprop aircraft, and the numbers are surprisingly close.

If an airline is looking for a turboprop to serve smaller markets 300 nautical miles apart, then the ATR looks to be marginally the better choice from a purely economic perspective. The crossover point in our view is at about 275 nautical miles.

But economics aren’t the only factors in the decision process.
  • The Q in the Q400 name stands for the noise and vibration reduction technology that Bombardier pioneered.  Although ATR uses passive noise dampeners, the Bombardier Active Noise and Vibration Suppression is a more sophisticated offering.
  • If an airline has to handle mountains in excess of 11,000 feet, or flies through areas that provide challenges where additional engine power would be useful, then the Q400 is the clear choice, as its more powerful engines provide a single engine service ceiling of 17,000 ft versus 11,000 for the ATR. Short field performance is superior and climb-time to cruising altitude is faster.
  • If an airline needs an airplane to develop long, thin, routes over 300 miles the Q400’s performance and economic advantages grow steadily with range beyond 275 miles.
Turboprops have made a comeback because of high fuel prices.  As turboprops are the original open rotor engine, they are inherently more fuel efficient than turbofans.  They have also made a comeback because of the strides in cabin comfort levels that now match regional jets.  (like ATR’s new Armonia cabin) These aircraft now sport glass flight decks, head’s up displays and essentially all the features of a modern jet airliner. We expect to see the resurgence continue for the remainder of 2012.

4 thoughts on “The Resurgence of the Turboprop in Regional Operations

  1. Agreed, specifically high speed turboprops and jets in the 70-90 certificated seat range, although less in two-cabin configuration, are the most likely 50-seat regional jet replacements, giving the nod to the Q400 and possible 90-seat development.

  2. I think recent improvements on the ATR-72-600 caused it to dramatically out-sell the Q400. The ATR is a bit wider, higher, bigger and a further stretch is not unlikely IMO. For the Q400 it might be a challenge..

    Q400: http://www.cbsnews.com/images/2009/02/13/image4800200.gif
    ATR : http://www.cebupacificair.com/aboutus/fleet/images/atr_cross_section.jpg

    Maybe Bombardier can use the China build C-Series fuselage at some point to build a 100+ turbo prop. The Chinese are building their “own” slightly bigger prop though.. http://i.flamber.ru/files/st2/1211922554/1252242926_f.jpg, guess who’s angry..

    GE and PW Canada are developing suitable engines.

  3. What are the units for the vertical axis of the Deliveries figure (first one)? Are deliveries normalized to a particular year?

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