Why The ATR-72 Is Outselling The Bombardier Q400

An ATR 72-600; Source: ATR

A couple weeks ago, ATR announced its sales total for 2011. It’s order backlog outstrips that of its competitor, Bombardier, by a very very large margin. This post will shed some light on why ATR turboprops have been so successful, while Bombardier has been struggling.

To any passenger, the Bombardier Dash-8 Q400 appears sleeker, faster, and generally better. Bombardier boasts off an amazing plane that can perform much like a jet, flying faster and higher than the ATR 72-500 or -600, while carrying more passengers. What Bombardier doesn’t acknowledge is that the fuel consumption of the Q400 is around 30% higher than the ATR72’s, for the same flight. Despite the fact that the Q400 can pack in 6 passengers more than its competition at a comfortable 30″ seat pitch, and theoretically fly an extra 300Nm flight in a day, the economics still work in favor of the ATR72. In addition, the ATR72-600 has a much smaller price tag than the Q400, by at least US$7Million. In the airline business, it all comes down to the dollar.

The only real market that has embraced the Q400 is North America. Longer routes that the Q400 replaces with jets makes sense. But in the rest of the world, regional routes are truly regional, and the job is well done by the ATR72, be it the -500 or the -600. This has led to a larger number of ATR72 aircraft in operation, which has an important effect: a higher resale value. A used ATR72 can fetch much more than a similarly used Q400, all because the demand-supply economics work in its favor.

ATR is stretching its production limits on the ATR72, while Bombardier is going the other way with the Q400. The problem with Bombardier is more with the manufacturer than the aircraft itself. Bombardier’s focus is divided amongst its various aircraft, some competing with each other. For example, Bombardier’s turbofan CRJ700 is in the same league as the Q400, except for the engines. And the Q400 is marketed as a jet replacement, effectively killing the CRJ700. This internal product conflict can be very detrimental to sales and marketing efforts.

A Bombardier Dash-8 Q400 in Spicejet Colors; Source: Bombardier

To a passenger, a turboprop is simply a prop. The noise levels in the ATR72 aren’t any much higher than the Q400 with its ANVS system. A short hop on a noisy plane is more bearable than a longer, so deploying a turboprop on a sector longer than 500NM is plain torture. For a typical regional sector flying distance of about 300NM, the ATR72 picks up a maximum of 13 minutes over the Q400, which hardly makes a difference. To the well informed passenger, the Q400’s safety comes under question, after the spate of landing gear incidents that the aircraft suffered.

To an airline, 5 ATR72s can be bought in the price of 4 Q400s, and still a good amount can be saved. This gives 360 seats for the ATR operator as compared to 312 seats for the Q400 operator. On top of this, the ATR72 consumes much lesser fuel, which can translate to savings. Typical operations on the 300NM sector reveal the ATR having only a 7 minute disadvantage in exchange for about 300kgs of fuel savings. Three ATR72s will save 900kgs of fuel over three Q400 flights, sufficient to fuel another ATR72 over 300NM. The ATR72 breaks even at around 35% load factor, while for the Q400 it is a much higher 60%. The ATR72 makes absolute and undisputed economic sense.

To a manufacturer, the ability to focus on one single product makes all the difference in winning a customer. You can’t expect to sell a jet and then introduce a product that kills the very jet you sold.

ATR’s focus on its turboprop-only product line, its offering of the most economical 70-80 seat airplane, its large geographical footprint, and its proven safety record have all contributed to the success of the now world’s best selling regional turboprop.

What A320 Sharklets Could Mean For An Airline Like IndiGo

Boeing 747-400 Winglet; Source: Boeing

Despite the advances in other areas, Airbus has lagged behind when it comes to large wingtip devices. The conventional and all too familiar wingtip fences that we see on the Airbus A300s, A310s, A320s and the A380s have done their job, but a scope for improvement always existed. Airbus A330s and the A340s broke from the norm by employing conventional winglets, similar to the ones seen on a Boeing 747-400.

On the 30th of November 2011, this wingtip complacency was relegated to a page in history. Airbus retrofitted the first ever A320 to be produced (MSN 001) with “Sharklets,” what Airbus calls their winglets. With this maiden flight, Airbus is ready to give to the world a much awaited confirmation and assurance of a winglet that will finally make its way to its production aircraft.

An Airbus A320 with Winglets, which Airbus calls "Sharklets"; Source: Airbus

First, let me give a brief explanation of how winglets work. Vortices form at the tips of wings as a result of the pressure difference that exists between the upper and lower surfaces of the wings. These vortices induce a drag which reduces the wing’s aerodynamic efficiency. Winglets are small , nearly vertical aerodynamic surfaces which are designed to be mounted at the tips of aircraft wings. A properly designed winglet impedes these vortices, shifting them instead further up to the tip of the winglet, resulting in much weaker vortices. As a result, the induced drag is significantly reduced, improving the lift to drag ratio of the new compound wing structure.

An increased lift to drag ratio implies lesser engine thrust requirement for a desired amount of lift, which directly relates to fuel savings. Like other winglets, these Sharklets bring with them a bundle of promises, the biggest of which is a 3.5% fuel saving over 3000NM-long flying sectors, and around 1% fuel saving over 500NM long sectors, in comparison to A320s flying with the conventional wingtip fences. These promises are fairly realistic. It cannot be underestimated how much a 3.5% fuel saving matters to airlines.

An example of an airline which will be affected by the new winglets is Indigo Airlines. Indigo Airlines is a low cost carrier based in India. Indigo operates only 1 fleet type, the A320, on a mix of medium haul international and short haul domestic routes. Almost a year back, Indigo made worldwide aviation headlines when it was one of the first airlines to agree to order 150 A320neo, which had been recently launched. It is continuing to expand rapidly in the Indian market.

The fuel savings caused by fitting Indigo’s A320s with sharklets are staggeringly large. Based on the flight schedule, Indigo can comfortably deploy one A320 on the Bangalore-Mumbai-Singapore-Mumbai-Bangalore pattern every day. Fuel cost at Bangalore and Mumbai have been approximated to be the same.

With this pattern, the same A320 operating with Sharklets can save about US$400,000per annum on fuel related costs.

According to John Leahy of Airbus, the price for the winglet will be similar to the forward fit, of around US$950,000. The retrofit kit may add to the cost, but the addition will not be substantial. Sharklets attached to an A320 flying the above pattern can pay back for itself in 2.5 years. Six A320s in Indigo’s fleet (INA-INF) are 5 years old. If Indigo plans to get rid of aircraft around 5 years old, a potential US$ 1M is saved by the airline, per aircraft.

But these are not the only savings. Either the revenue payload can be increased by 500kgs, or the range can be extended by 100NM at the original payload. The increased lift to drag ratio of the wing will result in higher available takeoff weights, notably from obstacle-limited runways, and where runway performance is not limiting, operators could profit from a reduction in average takeoff thrust (with consequent savings in engine maintenance costs by around 2%). The Sharklets lend the aircraft a better takeoff performance and rate-of-climb, higher optimum altitude, higher residual aircraft value, and greater safety margins in the event of an engine failure. All these mean money for the operator.

When you think about the fact that these cost savings will be available to every single operator of the A320 worldwide, thousands of aircraft will be reducing fuel burn and costs. This is a major improvement for airlines’ profit margins, the fares that customers pay, the environment with regards to emissions, and more. It will be interesting to watch for other improvements announced by aircraft manufacturers in the future.