March 19, 2015: C. Leeham Co. Bombardier’s current challenges don’t end with the CSeries. The company has seen its once-dominate positions in the regional jet and turbo prop markets decline precipitously.
The CRJ struggles in its sales against the Embraer E-Jet. The Q400’s market share of the turbo prop sector has declined to a mere 10% of the backlog vs ATR.
Still, Ross Mitchell, vice president of Business Acquisition and Commercial Aircraft for Bombardier, gave a spirited defense and upbeat outlook of both products during last week’s ISTAT conference in Phoenix. In a one-on-one interview the next day, we posed a series of questions about the CRJ and the Q400. Today’s report is about the Q400. Tomorrow’s will be about the CRJ.
“What you have to remember about the Q400 is that for a while, ATR was capturing a lot of larger market share that was largely driven by Asian customers,” Mitchell told us. “The Asian economy was hot and the Asian customers were buying airplanes.”
One such customer last year was LionAir, which placed an order for 100 ATR72s.
“There are now more North American customers placing orders, including WestJet [Canada], Horizon [USA] or Air Canada. In North America, as the economy improves, we’re going to benefit from that, because ATR hasn’t won an order in North America for quite some time.” Mitchell said. “That’s because the ATR isn’t suitable for the North American environment the way ours is. The range is generally longer in North America. [Airlines] will use the speed. The Q400 benefits from that.”
Mitchell’s point about ATR sales is true, but in our interview with ATR CEO Patrick de Castelbajac March 3, de Castelbajac said he’s going to target North America to win sales here.
Mitchell said that Bombardier has been “very successful” with the Q400 in the emerging African markets.
“African customers are looking for a couple of things that we can deliver that ATR can’t,” Mitchell said. “That’s the business class interior and the dual lav interior. ATR can’t offer that. We can offer 74, 76 seats with a nice business class in front and a forward lav and a lav in the back.”
The Q400 has a well-earned reputation in the industry of being considerably more expensive to operate than the ATR, if the Q400 is flown at high speed as designed. Less well known—in fact, it’s a pretty well-kept secret—is that if the Q400 is flown at a cruising speed similar to the ATR’s the per-seat economics are fairly close.
“For a long time, we were messaging speed,” Mitchell agreed. “Now you have to think about the airplane as a more flexible airplane. We can match what the customer needs. If the customer needs a high density, extra capacity airplane, we’ve got that. We published a fuel manual earlier this year which came out with a number of techniques, including slowing the airplane down, which result in better fuel burn numbers. It comes to the point where the trip costs are very close.
“You’ll always have the benefit of extra seats for the Q400. You’ll always have the benefit of the speed should you need it,” he said.
Mitchell noted that the Q400 could be scheduled at a low-speed cruise but if it’s late, “you can speed the airplane up” to maintain schedule. “You can’t do that with the competitor’s airplane.”
Mitchell also said that the Q400’s more powerful engines give the airplane an advantage over the ATR in hot-and-high and mountainous environments. The Q400 also has drop-down oxygen equipment.
“We’ve had to migrate away from just selling speed,” Mitchell said. “Speed doesn’t work for everybody.”
I believe Bombardiers view of the Q400 market potential has the following weakness:
-US market actually shrinking as United-Republic are sending their whole Q400 fleet to UK in exchange for E-jets
-Horizon has so far re-ordered small quantities and mostly to replace earlier models Q400s, this may change obviously.
-the big three legacy airlines in the US are about to max out on 70-seat fleet under existing scope clauses, so far they have chosen 70-seat jets.
-which leaves few other carriers to potentially order Q400 in the US but none has so far, this obviously applies to ATR as well…(examples Hawaiian, Jetblue ?!?, who else?)
-all this leaves West jet, Porter and Jazz in Canada as the main North American “saviors” for the Q400.
-Africa does seem to like Q400 but it’s smaller quantities and if you look at the whole African market including North Africa, I believe ATR is out selling the Q400 but I have not checked latest fleet numbers.
-high density version takes more pax at the expense of fever bags..wonder how many will pick it, so far only Nok.
-he is correct that fuel flow reduces with slower speed but the Q400 still has a weight and price challenge versus ATR.
Don’t get me wrong, the Q400 is a good aircraft but it’s market window is just too narrow with the cheaper ATR from “below” and the faster jets from “above” shrinking it’s market potential. On top of that there are more used E170s available and with fuel price being where it is perhaps some will pick that as short-medium term solution.
Another challenge for Q400, it’s residual values are not holding up, older Q400s are not worth much more than a good used Q300.
The Q400 is an aircraft designed and built with a mentality of there over 20 years . Since, it is more a matter of marketing . It will take a little time to find the money for Bombardier and review this aircraft with a range of new products. Maybe they could start a new ” Series” stuff like TurboLiner ( TSeries ) ? With help from the marketing guys to promote the imagination of Turbo.. With the TS75 (75 seats), TS100 (100 seats) and TS125 (125 seats). New aircraft with advanced technologies , which would be designed with the current skills of Bombardier. The time of présent is rather the imagination stretched forward , right?
In other news Aeroturbopower claims that Leap 1B is missing it’s SFC target by a whopping 5%. If true this could have huge consequences for the competitive dynamics between NEO and MAX.
This is bad news for Boeing. Headaches for Airbus . Delays are probably to be expected if GE confirm this. Good news for Bombardier CS500 …
How is possible to have a such big difference? What about the -1A and the -1C?
Boeing PR called that the sweet spot, the optimal ratio…
Only if you want to know more …
Not the most reputable or impartial source in the industry and thats putting it extra mildly with cherry on top.
Mr Hamilton, Thanks for putting this second part or Mr Mitchell’s interview outside the paywall.
Further stretching of the Q400? The Q400 is already a double stretch of the original 37-39 pax DHC-8-100 series. Any further stretch would likely require an auxiliary landing gear under the tail…
For better and for worse, BBD has to live with the Q400 for at least the medium term. They can sell enough to keep the production line active. With the current upgauging trend in all segments, the market could eventually catch up to the Q400.
Paradoxically, despite the Q400 supposedly being too much plane, it is ATR who is under pressure, and wants, to build a larger and faster 90-seat turboprop. So if the Q400 niche is so small, why does ATR wants to move into that market?
The Q400 is too large for most regional flights with 70+ seats and so no sales to the legacy carriers. The 70 to 90 seat RJ’s are more able to meet different route needs, fly farther, higher and have more customer acceptance.
I have not flown the Q400 but have flown the Dash-8-100 and 300’s. A noisy,vibration filled flight which seems to move at a snails pace. I have flown the PHL-ROA route with both, the Dash-8 and the CRJ-200. No comparison in comfort and quiet and speed.
Apart from a few sales, the prop has very limited appeal to both airlines and passengers. Its days are numbered at least in this country.
Days are numbered ? Ask any small city would you like a choice of turbo prop or no service. I can guess the answer. The US must be the only country with a large number of small town airports who have no or very little service.
Perhaps some of the subsidy given to run B1900 services to flyspeck towns should be distributed a bit more thinly to 50 -70 seaters as well
I have flown on the Q400 many times. It is much better that the Dash-8-300. Noise and vibration are substantially quelled by the active noise cancellation system:
The Q400 is not “quiet”, but certainly acceptable. The Q400 is much faster than the Dash 300, so that my typical 500 miles flight doesn’t take much more time than it used to on the CRJ-200.
On takeoff, the “overpowered” Q400 accelerates aggressively on the runway, and then jumps in the air with enthusiasm. The takeoff performance is more impressive than the lumbering B-777 I took on a flight to Europe last November.
The main downside of the Q400, and other turboprops, from a passenger point of view, is that turboprops fly at lower altitudes, which tends to make for a bumpier ride.
Alaska Airlines uses them exclusively for the under 100 passenger routes (former Horizon Air) and they do really well with them. They flew CRJ-700 previously and those are gone. Economics not preference is the mainstay for AK on those routes.
It seem the Q400s work very well for them. They replaced 737 between anchorage and Fairbanks with them in the last year (roughly).
While pax not happy they are far more economical on that short route (around 350 miles in this case). When its about economics and you have a captive audient it works financially. Pretty much what its all about.
I don’t care for the seats but you don’t spend a lot of time in them as they are fast and flown on routes that work. No idea if they take advantage to throttle back but it seems they don’t on the routes I am on.
Far better than no service.
Being in northern Canada, I’m all too familiar with the Q400 since it’s what Air Canada, Porter, and Westjet use on almost all their regional services. It’s certainly quieter and more comfortable than either the Dash 8-100/300 or the CRJ-100/200 but worse than a 737 or A320. I’d say it’s generally comparable to the CRJ-700, although after experiencing the new United slimline seats on IAD-YYZ last week I think the Q400 might be a bit better!
Maybe the Q400 is the 757 of Turbo Props.
Extra performance no one really needs but still has to pay for.
“Less well known—in fact, it’s a pretty well-kept secret—is that if the Q400 is flown at a cruising speed similar to the ATR’s the per-seat economics are fairly close.”
Maybe not only a well-kept secret, but also an incorrect observation.
If you are flying an Q400 at ATR speeds missions, someone has to pay the fuel bill for 4000kg metal flown around, equivalent to 40 passengers with their luggage.
OEW Q400: 17,185 kg – 37,886 lbs
OEW ATR72: 13,311 kg – 29,346 lb
If the “per-seat economics are fairly close”, doesn’t that account for the extra weight?
Yes, the fuel bill should be part of the total economics and IF seat mile cost is “claimed” to be similar it IS taken into account, BUT this assumes aircraft is flown 100% full on EVERY flight, because seat mile economics counts all seats.
In real life this obviously will not happen, but the extra weight is EVERY flight, hence the weakness of this argument.
I wonder why the Q400 is so much more expensive to buy. Is it just the engines? They need to find a way to take some cost out of it. Perhaps work with a Chinese manufacturer to redesign and co-produce. Its hard to justify the Q400 economic. If it was not for the ATR crash a few decades ago due to icing I doubt the Q400 would still be in production. If you are worried about flight time the CRJ900 does the job.