Bombardier, manufacturer of the world’s largest western civilian turboprop aircraft, the DHC-8 Q400, today launched the 90 seat variant at the Singapore Airshow, making the largest airplane even larger in terms of capacity, without so much as stretching the airplane by an inch.
The Q400 usually seats 78 passengers in a single class with a 30 inch seat pitch. In 2013, Bombardier had launched the 86 seat variant of the Q400, with Nok Air of Thailand as the launch customer. The 86 seat variant offered a seat pitch of 29 inches, by shifting the aft galley into the aft cargo hold, thereby reducing aft cargo space by 20%, and doing away with the forward baggage hold.
This made the case for Bombardier to announce a 90 seat variant with a seat pitch of 28 inches. To add an extra 4 seats, or one row, Bombardier is, according to Flightglobal, will push back the rear bulkhead and reconfigure the front right hand door. To make the airplane more attractive, Bombardier is increasing the 90 seat variant’s payload by 900 kg, and proposing an escalation of the A-Check and C-Check intervals from 600/6,000 to 800/8,000 flight hours. The 90 seat variant is expected to enter service as early as 2018, provided Bombardier secures a launch customer for the type.
Why at the Singapore Airshow?
There are four reasons why ATR and Bombardier are focusing on South East Asia. First, the geography and infrastructure of countries is such that connectivity within the country is best offered by short haul air transport. Second, the region is comprised of developing nations, where the end customers, the passengers, are very price sensitive. Third, demand for travel is rising. Fourth, the average height of the population is much shorter than the western world.
Turboprops are excellent for short and thin routes. Average ticket prices can only be lowered if the cost per seat falls further. The same airplane packing more seats lowers the cost per seat per flight, which allows airlines to compete better using pricing as a tool. The 90 seat variant may reduce the cost per seat by as much as 11-13% when compared to the 78 seat variant, and by 3-4% when compared to the 86 seat variant. Packing more seats reduces the seat pitch, which would have been a repulsive product to sell to passengers in the western world. But in South East Asia, the lower average height makes a 28 inch seat pitch comfortable. South East Asians are, on average, one of the shortest in the world.
Bombardier had launched the 86 seat variant at Dubai, but the launch airline is from a South East Asian country. Knowing that any demand for ultra high density aircraft variants will only come from Asia, Singapore Airshow 2016, Asia’s biggest commercial aerospace and defense exhibition, had to be the platform of choice.
ATR received EASA certification for its high-density cabin layout which fits 78 seats, using the existing airframe which was until recently certified for a maximum of 74 seats. Cebu Pacific, the leading Phillipines low cost airline, is the launch customer of this new configuration of the ATR 72-600. The airline had formally announced an order for 16 ATR72-600s during the Paris Air Show with options to acquire an additional 10 ATR 72-600, worth US$673 million at list prices.
Cebu Pacific will receive its 78 seat aircraft in August 2016. According to ATR, ” The additional seats are very valuable for airlines operating in the regions where traffic grows rapidly and the demand is highly sensitive to fare”. According to Thierry Casale, ATR Senior Vice President Programmes, “The demand comes from airlines, especially in the Southeast Asian market, requesting to further optimize the cabin space and to increase the number of available seats for regional flights".
In August 2014, Thailand’s Nok Air took delivery of an 86 seat Bombardier Q400, becoming the launch operator for the extra capacity seating configuration. Bombardier was able to squeeze in 86 seats at 29 inches seat pitch by shifting the aft galley into the aft cargo hold, thereby reducing aft cargo space by 20%. Forward baggage hold is done away with.
ATR can pack in 78 seats by reducing seat pitch to 28 inches, downsizing and moving the aft galley into the rear cargo compartment, and by placing two rear facing seats in the first row, which take up a part of the otherwise forward right cargo hold, thereby reducing forward cargo space. ATR’s target is an 80 seat ATR 72, which will be possible only with four, rear facing seats on the first row. Such seats do not recline.
The configuration is built with the current SFE Geven Classic seats, requiring no special or different seats.
Interestingly, demand for these configurations have come exclusively from South East Asian low cost operators. According to a study that the ‘Association of Southeast Asian Nations DNA’ conducted, Filipinos are the second shortest race in the South East Asian region, with males measuring 5 feet 3.7 inches. Thailand’s males are the second tallest, at an average 5 feet 6.9 inches. This makes Filipino men 4.8% shorter than the average Thai man, while a 28 inch seat pitch is only 3.4% lesser than a 29 inch seat pitch. Assuming similar thin seats on both aircraft, Filipinos, due to their height, may feel as comfortable, if not more comfortable, than Thai men flying in the high density Q400.
Indonesian males are the shortest in the South East Asian region, at 5 feet 2 inches, which makes the 78 seat variant well suited for the Indonesian market. If airlines are scientifically driven, airlines in other countries may not opt for the 78 seat variant, unless the business model decides otherwise.
The 78 seat ATR 72 seats 4 more than the until-recent maximum of 74. Assuming a 100% seat factor, 4 extra passengers will burn around 11 kg additional fuel on a 250NM sector, assuming ancillary cargo remains unchanged. This results in a 1.3% fuel burn increase on a 250NM sector, or a 0.65% increase in costs assuming fuel is 50% of the total operating expenses. Yet, due to the four additional seats, the cost per seat, after including the fuel increase, drops by 4.5% on a 250NM sector. We ignore possible increased maintenance costs due to slightly higher stressed operations.
This allows an airline to drop average fares by down to 4.5% to remain competitive in the market at unchanged margins.
Besides all the visible innovations that SpiceJet is grabbing the headlines for, the airline is doing certain other things quite differently.
Any airline will like to make the most of a peak season by increasing flights, and providing increased connectivity and flight options. There are two ways to do this : by growing the fleet or by flying the airplanes harder. SpiceJet is doing both.
The airline does not yet seem to be ready to lease more airplanes the conventional way. It instead is wet leasing airplanes from eastern European airlines, which have capacity to spare. In the month of October, the airline will be inducting 6 Boeing 737s on a wet lease (ACMI lease) basis – which means the airline will not have to bother about flight crew, cabin crew, maintenance and insurance. Wet leases can turn out to be more expensive than a dry lease with in house crew, maintenance and insurance, but it offers SpiceJet one big advantage – to modulate its capacity to suit seasonal demand.
SpiceJet today is the only airline in India to be actively wet-leasing airplanes to bridge capacity shortfalls.
The airline presently has one Airbus A319 wet leased, and 2 of the 6 wet leased Boeing 737 NGs to be inducted this month have arrived – OK-TVX and OK-TSF. OK-TVX flew for SpiceJet during the summer peak season, along with two other Boeing 737-800s. The two 737s arrived on 8th October, 2015.
The airline’s remaining Boeing fleet is all dry leased, and the Q400s are owned. Of the 20 Boeing 737s, 16 are Boeing 737-800s and 4 are Boeing 737-900s. Before the 2 wet leased airplanes arrived, one Boeing 737-900 was undergoing heavy scheduled maintenance, ‘C’ checks. After the two leased airplanes arrived, a Boeing 737-800 went into scheduled maintenance. In total, the active narrow body mainline jet fleet as of today is comprised of 15 dry-leased Boeing 737-800s, 3 dry-leased Boeing 737-900s, 2 wet leased Boeing 737-800s and 1 wet leased Airbus A319, in addition to 14 Bombardier Q400 turboprops of which 13 are active. The total active fleet is 34 airplanes strong, which is expected to rise to around 40 during November-December. The peak season starts in a week’s time.
To aggressively take on the domestic and international markets despite a small fleet of airplanes, SpiceJet has been pushing its Boeing 737s to fly much harder than usual. Some of the Boeing 737s operate 19:30hrs, 17:50 and 16:35 hrs. These patterns flown by the 737s witness the airplanes flying hard during the day, and operate long international sectors at night/early morning.
Of the LCCs in India, only two fly international – SpiceJet and IndiGo. IndiGo, which also operates late night / early morning international flights, operates its airplanes only upto 17:45hrs of utilisation, on a pattern that involves a late night Chennai-Singapore return flight. One of the airline’s patterns is all-international with just 4 flights, MAA-DXB-TRV-DXB-MAA, which uses the airplane for 17:35hrs. Both these patterns, however, are not as heavy in utilisation as SpiceJet’s.
While SpiceJet pushing its airplanes to fly harder increases revenue potential and dilutes costs, it also results in a higher chance of cascading network delays in case one flight gets significantly delayed. Having significant gaps between patterns reduces the chances of the delays of one day from cascading into the second day.
On the Q400 front, the airline pushes certain Q400s to operate upto 13:15hrs per day, with an average, network-wide utilisation of around 11:30hrs. This is good for a turboprop that operates mostly domestic. SpiceJet’s Q400 turboprops are the only turboprops in India that fly scheduled international services.
SpiceJet introduced the Q400s in 2011 as a game changer. The move was not in line with what low cost carriers world over had practiced. After Air Deccan, SpiceJet became the second low cost carrier (which we prefer to call low fare carrier) in India to adopt a dual fleet strategy.
The reasoning was simple enough. First, India is a country where certain routes are saturated while many routes with potential are unexplored. This is largely due to the misconception of a ‘one aircraft fits all’ strategy. Having an oversized airplane (in terms of seats) fly on routes that have insufficient demand only leads to poor control on pricing and revenue management. The hope that some routes will eventually grow to cater to the large jet is unwise. The right sized airplane matters. Second, blindly copying and pasting to India a low cost model that worked wonders overseas is again unwise. Every market is unique, and requires its own study.
But perhaps, SpiceJet wasn’t ready to handle the Q400. Perhaps, SpiceJet did not pull off a good deal with Bombardier. Perhaps, SpiceJet’s study was half baked. Perhaps, SpiceJet was short sighted and the turboprop may have performed better in the hands of a smarter, shrewder operator. But most importantly, perhaps the Q400 fleet and staff were meted with a step-motherly treatment.
Optimisations in the Q400 fleet are only now becoming visible. Ajay Singh is using pressure tactics to squeeze Bombardier to give the airline more. A few Q400s are expected to join the fleet, with the insurance payoff from the Q400 that was written off in a runway excursion at Hubli. The Q400 fleet size reduced to 14 Q400s from 15, and one Q400 that was cannibalised has now been restored and is apparently due for a maintenance test flight. The airline has also started to optimally fly its airplanes, to realise fuel savings and time savings. Time saved can accumulate to fly an additional sector. The airline is also working to better integrate the Q400 network with its Boeing network. After all, the Q400s are intended to primarily serve as feeders. Salaries of the Q400 flight crew have been brought on par with those on the Boeings.
The airline, four years late, has realised that the Q400 cannot play the ATR game. The Q400 must play the Q400 game. The turboprop has been designed to cater to routes that are as thin as the ATR’s, but longer than what the ATR s suited to fly. And that the USP of the Q400 is its speed.
The difference between the games of the Q400s and ATR72s? The Q400 focuses on maximising revenuepotential, while the ATR72 focuses on minimising costs. Those aren’t the same variety of apples to compare.
Simply put, the management wasn’t ready for the Q400.
The Q400s, today
As of today, 13 of the 14 Q400s in the airline’s fleet are active, with the 14th expected to join soon. Effective 16th July, these 13 Q400s will operate 116 flights a day, operating for a total of 149:20 hours each day, and deploying a capacity of 9048 seats on the network, daily.
Each Q400 flies on average almost 9 flights a day, and is utilised to just a minute short of 11:30 hrs per day, per aircraft. A year ago, the utilisation was at 10:20 hrs.
Of the 116 departures, the airline flies 76 routes (where the onward and the return are treated separately) between 38 city pairs. This is on average a frequency of 1.5 on each route. The Q400s serve 28 destinations, resulting in an average of 1.3 city pairs from each destination.
Of the 38 city pairs, 10 are monopoly sectors. Of the 38 city pairs, 34 are exclusively operated by the Q400s by SpiceJet. Of the 28 destinations, 15 are exclusively Q400 destinations. Refer the diagram below.
The Q400 flies the longest turboprop sector in India, between Jabalpur and Mumbai. Sectors like this are what the Q400 are better suited for: longer than those of an ATR, shorter than those suited for a jet. Monopoly sectors are in yellow. Nearly 90% of the city pairs are exclusively operated by the Q400 at SpiceJet.
Block times for the sectors do not necessarily match the distances. The sector block times, for the same sectors in the same order, are graphed below:
The most important stations for SpiceJet’s Q400s are, in order of departures, Hyderabad, Chennai, Delhi and Bangalore. Bangalore, despite being a hub, is not a base for the Q400s.
Jabalpur is important to the airline. Q400s from Delhi are swapped with the Q400s from Hyderabad at Jabalpur, necessary for maintenance which is at Hyderabad. Q400s from Chennai swap with the Q400s at Hyderabad through the Goa flights.
53% of the stations served by the Q400 are exclusive Q400 stations for SpiceJet.
Of the above stations, Belgaum and Tuticorin are exclusively served by SpiceJet, and operated to by the Q400s. Belgaum and Tuticorin are examples of airports that are either operationally unfeasible or commercially unviable to operate using a 180 seat jet aircraft. Most of the Q400 sectors listed here are commercially unviable for a 180 seat jet (the market isn’t yet sufficiently big), and atleast 40% of the sectors are not advisable to deploy a jet on, due to short sector lengths.
Typically, a regional jet with similar seats offers better operating economics and greater productivity when sector distances exceed 250 – 300NM. Average sector length for SpiceJet’s Q400s is 260NM, which speaks well about the way in which the asset is being used. 53% of the 38 sectors are below the average of 260NM, and 74% of the 38 sectors are below 300NM.
Flying the Q400 faster to save fuel?
The Q400 can be flown in one of four speed schedules – Long Range Cruise (LRC), High Speed Cruise (HSC), Intermediate Cruise Speed (ISC – between HSC & LRC), and Maximum Cruise rating (MCR). When arranged in order of increasing speeds, this is LRC-ISC-HSC-MCR.
Among 16 techniques in which an operator may realise fuel savings, optimisation of cruise speeds realises the largest potential gain. The Specific Air Range (SAR) curve below shows the distance travelled per pound of fuel. Higher the SAR, the longer the distance that the Q400 can cover for the same quantity of fuel.
While LRC (red line) would be the choice of speed for any operator who considers only fuel costs, SpiceJet used to operate its aircraft at ISC (purple line). This burnt more fuel, but saved time, which results in reduced time-related costs, and higher productivity.
Of late, SpiceJet has been flying its Q400s at HSC, for flights of around 1 hr in flight time (not block time). This translates to flights of sector distances of 300NM and below, which are 74% of all sectors flown by the Q400s at SpiceJet. Flying at HSC should, according to tables, burn more fuel, but pilots do report savings of around 150Kgs of fuel per sector. 150Kgs of fuel saved is around 14% of the trip fuel for a one hour flight time sector, which is a significant amount.
Such high fuel saving percentages with an increase in speed is not possible. The only explanation could be a host of other procedures that have been implemented that impact the overall fuel consumption. Better routing to take advantage of winds can have significant impact on fuel burns. Optimisation of weights, climb and descent profiles, improvised taxi procedures and approaches, use of detailed performance tables, and better APU management are some of the ways which fuel burn can be reduced.
The Q400 is an aircraft that must be used as a high speed aircraft that serves as a compromise between jet-like speeds and turboprop economy. Pushing the airplane to perform to either extreme is a significant deviation from the intended purpose of the aircraft, which leads to inappropriate and poor asset utilization.
Asset utilization seems to be on the increase. The Q400 is deployed on those routes on which a 180 seat jet cannot operate, thereby allowing SpiceJet to grow its roots into untapped markets to feed traffic to the mainline network. It is a gap filler. With more flights a day, the aircraft is being flown to its revenue generating potential. The networks of the two fleets – jet and turboprop are being aligned to cater to a hub and spoke model. However, a good narrow-body jet fleet size is required to allow the airline to make the most of the connectivity offered by its turboprop fleet.
In the light of Ajay Singh taking over SpiceJet, media reports and general speculation had pointed that the revival plan of Ajay’s ‘include culling the 15 Bombardier Q400 regional aircraft from the airline’s fleet’. On the contrary, The Flying Engineer has learnt that SpiceJet’s Q400s are here to stay.
While the industry in general is led to believe that a single fleet strategy is best suited for a low cost carrier, based on the success of Southwest, Ryanair, AirAsia, and IndiGo, The Flying Engineer has firmly believed in a dual fleet strategy to effectively penetrate the Indian market. This is based on the Indian market which falls into three broad categories:
Thick, long and short routes – markets which are mature and overcrowded, such as Bangalore- Delhi (long), and Bangalore -Goa (short).
Thin, long and short routes – markets which are evolving (underserved, and unserved), such as Bangalore – Chandigarh, Bangalore- Vishakapatnam.
Thinner, short routes – markets which will not mature easily – such as Vijayawada- Hyderabad, Bangalore-Belgaum.
The reason for the last market to not mature easily is the fairly good rail and road connectivity that is present between such city pairs. Yet, there is a segment (albeit small) of travellers who will pay for the time and convenience of air travel, which reduces an overnight journey to around an hour or so. Further, at many such destinations, the runways haven’t been upgraded to allow bigger jets to land, making them fit almost exclusively for turboprop operations with ATR72 (typ. 72 seats) and Q400 (typ. 78 seats). Since most travellers on this segment are those who value time and convenience, and because there is insufficient competition, an airline like SpiceJet enjoys good pricing power.
To support this, SpiceJet, in Q2 FY’15, realised a passenger-only RASK (excludes ancillary revenues) of INR 2.74/ASK, while the Q400s delivered INR 4.99/ASK. This passenger only RASK of the Q400 was higher than the average RASK (including ancillary revenues) of INR 3.26/ASK.
In Q2, the Q400 flew only 8.13% of the airline’s total deployed capacity, yet contributed to nearly 14% of the airline’s total passenger revenue. Interestingly however, the Q400 made up 30% of the airline’s fleet in Q2, but had only 14% of the airline’s total aircraft seats.
What worked the most against the Q400 was the maintenance costs, which The Flying Engineer has been led to believe is a problem of the past, when maintenance facilities were not available in the sub-continent. Perhaps the selection of the aircraft wasn’t right, but the dual fleet concept wasn’t wrong.
Should SpiceJet bounce back with the infusion of funds, the airline may have to redo the Q400 network a bit and play the aircraft to its strength, better feeding into the mainline network with traffic from Tier III routes. This is one of the ways a smaller player in the market can hope to survive through differentiation, and monopoly / duopoly, especially when established routes are crowded with very low margins.
The days of a dual fleet jet – a mainline narrow body complimented by a regional jet, are not far off, either.
Last Year, ATR produced 60 ATR 72 aircraft. Bombardier had produced 36 Q400s. 2012 saw ATR selling 115 aircraft (74 firm orders and 41 options), while Bombardier witnessed a sales of 81 aircraft (50 firm orders and 31 option aircraft).
This year, ATR is projected to produce 80 aircraft, almost all being the ATR 72-600. This will widen the gap between deliveries of the ATR 72 and the Q400, in 2013. A sign that the slower of the two turboprops, the ATR 72, is actually racing ahead of the Q400.
Maybe it’s the operating economics of the ATR 72. Or the average regional route lengths suited to its typical missions. Or the large number of operators in a region. Or the access to proximate training facilities. Or the rise of the developing nations while the developed saturate.
The aviation market in Asia, especially South-East Asia, is booming, in contrast to slowdowns and downsizing in Europe and the United States. In the February of 2013, ATR won an order for upto 36 ATR 72-600s, from Malaysia Airlines (MAS). Prior to that order, MAS had ruled out the ATR 72-600 series, on the grounds that there was no -600 simulator in the area. Says ATR’s CEO Filippo Bagnato, “In the last five years, Asia-Pacific has accounted for 50% of sales; so it is quite an important market for us". So important is the market that ATR, in December, set up a ATR 72-600 training centre at Singapore, just because one customer demanded it.
What resulted in the ATR epidemic in Asia, particularly South East Asia?
The rise of the South East, Average regional route lengths, superior operating economics, Aggressive Sales, local availability of ATR type-specific qualified pilots and engineers, Luck #1, and Luck #2.
The Rise of the South East.
Says Neil Dave, Consulting Analyst, Aerospace & Defense, Frost & Sullivan Asia Pacific, “Many ASEAN countries currently lack comprehensive and well developed ground transport infrastructure and countries in these regions are divided by vast seas, therefore there is a demand for a well-knit, flexible air-transport system,” said Dave.
“Also, with the increasing popularity of air-travel as mode of transport, there is a rise in demand for low cost travel among countries in the ASEAN region which are not connected,” Dave continued.
Quoting a CAPA report, “The continued strength of the economies in ASEAN, led by booming Indonesia, and the continued rapid rise of the region’s middle class should ensure another big year of traffic growth for Southeast Asian carriers – particularly LCCs and, to a lesser extent, full-service carriers."
Lucky with Route Lengths:
The ATR 72 is typically packed with 68 -72 passengers. Air Dolomiti in Europe flies its -72s with 66 seats, while Jet Airways (South Asia) has 68 seats, and this number can easily rise to 70-72 seats for South East Asian operators, thanks to the average height of the average male in the respective countries (Germany: 5′ 10″, India: 5′ 5″, Indonesia: 5′ 2.2″), which allow for a lower seat pitch.
The typical baggage weight limits for ATR flights in the SE-Asian region are 10kg for cabin and 15 kg for check in, totalling 25kg. With the average assumed body weight of 70kg per passenger, this total weight per passenger, including baggage, is 95kg.
With 95kg/passenger and 72 passengers, the payload goes upto 6840kg. Considering headwinds of upto 80kts at the cruise levels of the ATR, the useful range of the ATR 72-600 can be very safely assumed to be 500 NM. (ATR Literature claims 825NM for the -600 “option" [23,000kg MTOW] under the following conditions: ISA – No wind – JAR Fuel Reserves – Typical European Airline OEW)
500NM circles, centred at Mumbai, Delhi, Kolkata, and Bangalore, cover the whole of India.*
A 500NM circle, centred at Manila, covers almost the whole of the Philippines.*
A 500NM circle, centred at Bangkok, covers the whole of Thailand.*
500NM circles, centred at Kuala Lumpur and Kuching, covers all airports in Malaysia.*
500NM circles centred at Jakarta, Surabaya, Makassar, Ambon and Jambi cover most of Indonesia.*
The regional routes are tailor made for the ATR 72-600. Luck #1.
*Does not consider terrain and elevated airports beyond the performance limits of the ATR 72.
The ATR 72 is less expensive to buy (by list price, though the heavy market demand for the type may make Bombardier offer the Q400 for lesser), less expensive to operate (the Q400 consumes almost 30% more fuel than the ATR 72-600), and due to its simpler design and systems, has a very high dispatch reliability.
The lower operating costs results in a lower breakeven load, of around 35 passengers, which is about 6 to 10 passengers lesser than the Q400.
ATR and Airbus share the same parent company: EADS. The not-spoken-of fact is that if you buy an ATR aircraft, you get a good deal on Airbus airplanes. And vice-versa. On top of this, ATR’s sales team is comprised of an aggressive one, that can help with support from European export credit agencies. Further, ATR goes out of the way to secure a customer.
Bombardier is milder. “The aircraft sells for itself" is the attitude of key sales personnel. Plus, Bombardier has two nearly competing aircraft under its brand: the Q400, and the CRJ700. Both are in the 70 seat category, and have similar range. Bombardier, and the customer, are easily confused.
Bombardier, unlike EADS, does not, as yet, offer a comprehensive product line. The yet to fly C-Series will be Bombardier’s first single aisle mainline solution, which will well complement the Q400. But Bombardier still lacks the entire product line and capacity that would be needed for domestic operations: products the size of the A321 and A320.
Local availability of manpower and training facility.
There are only 5 operators of the Q400, in 4 countries of Asia. ANA and JAC in Japan, Air Niugini in Papua New Guinea, PAL Express in the Philippines, and Spicejet in India. There is no abundance of Asian Q400 pilots and engineers.
Although South and South-East Asia is teeming with ATR type pilots and engineers, the demand for the type is so high that there is a shortage of such qualified crew. This is where luck#2 plays a role.
ATR has one ATR 72-600 training centre at Singapore, which will help significantly reduce the costs of training and sim-checks.
There are ATR-type-rated pilots in Europe who could come to SE countries such as Indonesia. Lufthansa’s ATR operation Air Dolomiti, for example, will be downsizing, which will make ATR pilots available. They will need jobs, and they are in good demand.
The curious case of Citilink Indonesia:
Citilink, the low cost carrier of the national flag carrier, Garuda Indonesia, had considered the Bombardier Q400 for its turboprop fleet. It was believed that the Q400 would be chosen, to differentiate from the competition: Wings Air’s ATR 72 fleet.
Arif Wibowo, the CEO of Citilink, said that there were three key considerations to selecting the aircraft type: economic, such the purchase price; financing; and aircraft performance. In the request for proposals, Citilink required bidders to present a plan to provide pilots, and ATR had agreed to this.
Incidentally, after Citilink announced in the December of 2012 that had decided to order ATR 72-600s, it placed a firm order with Airbus for 25 A320neo, in the January of 2013.
The Head or the Heart?
Just because two or more aircraft are in the same class, it doesn’t mean that they’ll perform to the same standard. An airline’s requirement stems from route demand, and this demand defines the desired capacity, and range; Everything else that define the aircraft then play an important role in deciding the best.
In an airframe market, filled with competition, which results in options, the airline is caught between choosing a product that stands out from the other players, and choosing a product that makes the most economical sense. More often than not, what ego-driven airlines look for, is a differentiator, while truly customer focused airlines that are keen on operational viability, look for, is a suitable performer.
Citilink is a low cost carrier; and no 70-80 seat airplane beats the operating economics of the ATR 72-600. The Q400 has a greater performance (greater range, faster climbs, higher cruise speeds), and promising potential (upto 8 more seats on the same flight), but a potential remains a potential until tapped. Forego the 8 seats and you break even with lesser passengers. Look at the typical routes in South East Asia and they are all suited for an ATR 72, as typified by Wings Air, which is set to becomes the largest operator of the ATR 72. Watch the ever increasing fuel prices and you’ll want a less thirsty aircraft.
The Q400 promises more revenue potential, with more seats and an extra flight. But it has to fly more passengers to break even, and more passengers to make the same amount of profit that operating the ATR 72-600 will make. Not many regional sectors bring in 100% loads to tap that potential.
True that the Q400 flies faster, but there must be customers willing to pay for that speed. In a booming aviation environment that is low-cost driven, where the markets are yet to mature and loads are yet to pick up, economics is paramount.
In short, in most of Asia, a low cost carrier can only beat the ATR 72-600 with an ATR 72-600. For everywhere else, like in North America, you have the Q400.
(I so badly wanted to title this: “India’s second ERJ 170 series operator: Air Costa”. But we’ve learnt our lessons of a volatile industry, the hard way.)
Air Costa, the Vijayawada based operator that had initially planned to launch operations using five Bombardier Q400s, is finally taking delivery of two Embrarer ERJ 170s. These E-Jets are leased from ECC Leasing. ECC Leasing was established in 2002 to manage and remarket Embraer´s pre-owned aircraft.
Both the ERJ 170s were formerly flying for Gulf Air, and were stored in Germany. One of the airplanes was spotted when it recently received its Air Costa paint scheme from Airbourne Colours at Bournemouth, UK. Airbourne Colours specialises in painting commercial, corporate and military aircraft. The second ERJ 170 is expected to roll out of the paint shop on the 29th of January, 2013.
The two ERJ 170-100LRs are presently registered G-CHJI (MSN 17000278) and G-CHJU (MSN 17000293), and will hopefully bear their Indian registrations soon. The last time Embraer 170s (-200LR, marketed as ERJ 175) were registered in India was when Paramount Airways was operating the type, until the airline ceased operations in 2010.
Air Costa’s Operations are expected to commence in the April of 2013. Reportedly, plans are to operate from Vijayawada to Ahmedabad, Bangalore, Chennai, Hyderabad, Pune, and Vishakhapatnam. Air Costa’s promoter, LEPL (Lingamaneni Estates Private Limited), is a Vijayawada based company involved in infrastructure, power, hospitality, education and entertainment.
Surprisingly, the website has published a requirement only for captains, and not first officers or Aircraft Maintenance Engineers. [EDIT*: Experienced pilots with Jet and Turboprop experience have already been recruited and type rated . Most other staff including Engineers have been recruited and trained as well . Recruitment for Cabin Crew is still going on. Experienced crew have been taken to meet insurance requirements.] Further, as per existing civil aviation rules, the yet to take-off “airline" requires a fleet of a minimum of five airplanes, within one year of grant of operator’s permit, to continue its “scheduled passenger air transport services". However, for a “scheduled regional air transport service", operations can commence with just one airplane, with the condition that the fleet size grows to a minimum of three aircraft within two years, and a minimum of five aircraft by the end of five years from the date of securing the operator’s permit.
Since none of Air Costa’s planned routes are Category I (certain Metro-Metro pairs), Air Costa may very well start with a Regional Scheduled Operator’s permit.
As per existing Civil Aviation Rules, “Scheduled Regional Air Transport Service means a Scheduled Air Transport service which operates primarily in a designated region and which on grounds of operational and commercial exigencies may be allowed to operate from its designated region to airports in other regions, except the metro airports of other regions.”
Based on available information, the fleet will comprise of Embraer 170-100s, of a yet unknown fleet strength [EDIT*: 3 additional ERJ 170s are expected, in the period of 6-8 months following the commencement of operations] . This Embraer 170 variant can seat upto 80 passengers, with typically 78 being opted for. The maximum takeoff weight of the heaviest version is 38,600kg. Being lighter than 40,000kg MTOW qualifies Air Costa to pay only 4% service tax on fuel, as opposed to as much as 30% service tax for heavier aircraft. Further, the Airport Authority of India (AAI) does not charge domestic scheduled operators any landing fees for aircraft with a maximum certified capacity of less than 80 seats. These factors bode well for Air Costa.
Why the Embraer 170?
The ATR 72-500/600 burns roughly 760kg/hr, and claims a range of around 825 nautical miles (NM) with 70 passengers at 95kg each. The Embraer 170 burns roughly 1,400kg per hour, but claims a range of close to 2,000 NM with 70 passengers, or a little less than 1,500NM with 80 passengers, at 100kg each. While it may initially appear that Air Costa has gone in for an aircraft that consumes nearly twice the quantity of fuel of the most economical-to-operate western world turboprop, operating economics seem to have possibly been traded for operational flexibility, with the speed of a jet.
For example, the longest sector that the ATR 72 is operated on, in India, is 500NM. The air distance, under no winds, between Vijaywada and Ahmedabad is around 700NM.
Although the ERJ 170 is listed at around US$28M, US$5M costlier than the US$23M listed ATR72-600, slowing sales of the 70 seat jet leads to lowered market value, which translates to attractive purchase or lease rates for operators. In 2012, Embarer produced just 22 ERJ 170 series airplanes (170 and 175), of which only 2 were Embarer 170s; the rest being ERJ 175s. In contrast, ATR produced 64 airplanes in 2012, of which 60 were the ATR 72-500 and 600: airplanes with the same seating capacity as the ERJ 170. With a backlog of 221 airplanes: ATR has the largest backlog for regional aircraft up to 90 seats. In summary, significantly lower demand for the EMB 170 may make it available for cheaper than an equally aged ATR 72. [EDIT*: They were planing on leasing 3 Q400 from Botswana but Embraer offered them a better deal that they couldn’t resist.]
The two airplanes that Air Costa is leasing were delivered to Gulf Air in the March of 2010, but were stored in the July of 2012, logging 2 years 4 months of service with the Middle East carrier. Only in the January of 2013, did the aircraft take off in the colours of their new operator.
Air Costa: A behavioural review
Air Costa’s initial announcement of the launch of its airlines with five Q-400 Turboprops, followed by its sudden change of the airplane type within less than a year reflects poor homework, preparation and research, on the part of the airline. Hopefully, the airline has well researched its routes. Further, it is hoped that the demonstrated fickle-mindedness does not reflected in its business plan, making it yet another airline that blossoms only to quickly wither away.
* With Inputs from Cyril Roy
[Images of the Air Costa airplane may be viewed here: LINK]
The ATR 72-500 has its idiosyncrasies. In the cockpit is a “seat position sight gauge", which are three small, coloured balls that allow a pilot to adjust his viewpoint to a position that ATR deems appropriate, allowing for a “correct view of instrument panels as well as runway environment". The photo above shows the ATR 72 cockpit, with the sight gauge enlarged in the inset. If the first officer is to have his viewpoint right, he must adjust his seat height and position such that when looking at the three balls, the left white ball is obscured by the red centre ball.
Eye Level Indicator on the Q400
Interestingly, this gauge is not found in the Boeings, where the recommended method of adjusting the viewpoint is different. The ATR 72-500/600’s competitor, the Q400, however, has something similar, called the “eye level indicator", as may be seen in the second photo. The Airbuses, not surprisingly, have a sight gauge similar to that found on the ATR.
Possibly one of the smartest first officers in India told me, after seeing me so diligently adjusting my P1 seat in an ATR 72-212A (500) to the correct viewpoint, that I was too high. Apparently, the seat position sight gauge does do its job well, but it isn’t something you’d want to level your eye with on an airplane like the ATR 72-500. Why? Visual perspective.
With the eyes adjusted, the view is good, and clean. But with the ATR 72, (and the Q400) one has to be very careful with the flare: the airplane’s fuselage is long and low, and a tail strike is easy. Another complication is the aircraft itself: having a constant speed propeller means that when you pull back on the power levers, the pitch angle of the propeller blades changes to “fine" (almost perpendicular to the direction of the airplane’s travel through the air), resulting in a significant increase in drag. If the flare is more than required, and the airplane balloons*, pulling back on the power levers is the last thing one would want to do, as the drag would make the aircraft drop to the runway like a stone! So one would add power to keep the airplane up, and this will eat up more runway: Messy indeed. And for him, with the ATR recommended viewpoint, comes the tendency to flare more than required.
*[The term “balloon" refers to a landing airplane that rises slightly before touching down. Ballooning is typically caused by excessive airspeed or excessive back pressure being applied to the flight controls by the pilot during the landing flare]
So what he does is to sit lower than the recommended view point: low enough to make him actually look up to see outside. This works well for him, and few others who have settled for this more comfortable, though not recommended, seating technique. Anything that works!
What can go wrong just because of an improper flare?
On 9th May, 2004, N438AT, an ATR 72-212, during the approach to landing, the captain stated to the first officer (flying), “you better keep that nose down or get some power up because you’re gonna balloon.". After the airplane crossed the runway threshold, the captain stated, “power in a little bit, don’t pull the nose up, don’t pull the nose up." The captain then stated, “you’re ballooning,". The airplane touched down with a vertical load of 1.3G, bounced into the air, touched down a second time, then bounced into the air with a nose up of 9°, climbed to 37 feet, and touched down a third time with a vertical load of 5Gs. After a fourth touchdown, the badly damaged airplane came to a stop outside the runway.
On 17th September, 2005, D-ANFH, an ATR 72-212A, Just prior to touchdown, the co-pilot pitched the aircraft nose up to an attitude of 6.5º. The aircraft landed hard on the runway and bounced; in the course of the initial touchdown, the lower rear fuselage struck the runway surface.
On 23rd May 2006, G-BWDA, an ATR 72-202, towards the conclusion of a brilliant approach, the first officer closed the power levers at 10ft and flared the aircraft. The airplane touched down, bounced into the air, and the attempt to arrest the sinking of the aircraft to the ground, pulled back on the control column, striking the tail.
And yes, I have also heard some of my friends say, “Oh damn, I forgot to flare!"
Making up in part for the poor representation of the Q400 in Asia is LEPL, the business conglomerate with a footprint in Infrastructure, Power, Entertainment, Education, Hospitality and Health Care, that announced on the 22nd of February a new regional airline catering to Tier II & Tier III cities using a fleet of 5 Q400 next gen Turbo prop aircraft.
Headquartered at Vijayawada and with hubs planned at Hyderabad and Chennai, the all turbo prop airline, Air Costa, plans to start operations in either May or June in preparation for which a newspaper advertisement was brought out calling applications from Captains, transition captains, first officers, cabin crew, aircraft maintenance engineers, and other ground staff.
The Q400 Next Gen’s direct and only competitor, the ATR 72-600 may have given the Vijaywada base airline’s decision makers a tough time in choosing the right aircraft for their operations. The ATR 72-600 is more economical, with the direct operating costs lower than that of the Q400. The ATR 72-600 consumes significantly lesser fuel than the Q400 per passenger, breaks-even at a lower load factor, costs 7-8 million USD cheaper to procure, and yet Air Costa chose the Q400.
Three reasons can make the Q400 more attractive than the ATR 72-600: its ability to carry an additional 6 revenue paying passengers, its high performance, and most importantly, its range.
Looking up manufacturer published range v/s payload charts, the Q400 and the ATR 72 can be compared on an almost level ground. Bombardier’s published data is unambiguous: They clearly specify the range is considering fuel reserves for a 100NM alternate airfield, 45 minutes of holding time, and 5% flight fuel contingency, and that the aircraft is flown in high speed cruise. ATR on the other hand puts these reserves under “JAR Fuel Reserves”. This conceals the assumptions: the distance to the alternate airfield isn’t known, and in previous brochures, an 87NM alternate was considered. This only means that the range indicated by ATR may be lesser than projected if one is to consider a 100NM alternate.
ATR 72 (left) and the Q400's (right) Range-Payload chart. Note that the Q400 chart is for High Speed Cruise, 100NM alternate, 45 hold and 5% fuel contingency, while the ATR 72's chart keeps the essential details hidden.
Nevertheless, ignoring the differences and pulling out the figures still puts the Q400’s range (High Gross Weight version: the Q400 variant used by Spicejet) a minimum 80NM greater than the ATR 72-600’s (the “OPTION” that ATR offers, which boasts off greater range and weights than the “BASIC” variant), at maximum passenger load (78 X 102 = 7959kg for the Q400 and 72 X 102= 7344kg for the ATR 72-600), this maximum payload considering passengers at 102kgs each (75kg adult + 20kg check in+ 7kg cabin baggage).
*Data from Bombardier. **Data from ATR
This 80NM makes all the difference in planning a flight from Hyderabad to Tiruvananthapuram (Trivandrum). Considering the fact that Air Costa plans to serve Tier II cities in India, there is no reason why this sector wouldn’t be considered. Spicejet operates a daily Q400 flight direct from Hyderabad to Trivananthapuram, with a scheduled block time of 2hrs 15 minutes, with Cochin as the alternate, which is around 100NM away. The ATR 72-600 on the other hand will not be able to fly direct between the city pair with full payload. Deviations due to weather, winds, and flying airways that zig-zag in varying degrees add air distance: all this combined with the 100NM alternate (Cochin) will make things tough for a flight planned on the ATR 72.
The Q400’s range presents operational flexibility. A flight from Chennai to Mumbai, with Pune as the alternate may also be planned on the Q400, but not on the ATR 72.
Air Costa may settle for a cabin configuration similar to Spicejet’s: 78 seat, 30″ seat pitch all economy configuration.
With an all turbo prop fleet, Air Costa will enjoy the lowest fuel cost per aircraft per litre of ATF (Aircraft Turbine Fuel) amongst all scheduled operators in India, due to the non-applicability of sales tax on ATF for scheduled operation with regional aircraft of seating capacity less than 80 seats. Considering the sad fact that in India, ATF accounts for nearly 50% of operating costs, the savings cannot be overemphasised. The Q400’s flexibility in range and speed can potentially throw open an all new airline to the Indian traveller: an airline that can keep costs low, flexibility high, giving other airlines a run for their money.
The timing of Air Costa isn’t bad either. With Kingfisher Airlines’ flight and cabin crew applying outside to other airlines, there may be no dearth of experienced manpower. With 5 aircraft and an average estimated requirement of 10 pilots per airplane (commanders + first officers), at least 50 flight crew members and possibly about 50 cabin crew would be needed, all of whom may easily be “sourced” from Kingfisher.
In conclusion, Air Costa will operate an aircraft that will offer it immense route flexibility, while keeping costs very low. With good planning, strong political connections, and the introduction of frequent flights between Tier I cities (such as Bangalore-Mumbai, Bangalore-Chennai, Hyderabad-Mumbai, Hyderabad-Bangalore and Chennai-Mumbai), Air Costa may, if well managed, become the envied airline of tomorrow.
VT-SUG is on display at India Aviation 2012! This is the very first public display of the Q400 in India, and the aircraft is all prim and proper. It smells good, it feels good, and the flight deck: as good as it ever will be. Very ergonomic, and not too crammed except for the act of making your way to the flying seat. (more text below)
Good overhead cabin bin space!
ANVS control panel
Capt Surinder Singh (Chief Pilot) and my friend Deepankar Singh
With 78 seats, and loads of interest from curious onlookers, the jet engine core- driver turboprop aircraft is making heads turn. The cabin overhead is spacious, the lavatory is more accessible, but just the seats make you uncomfortable.
Says Eric Sharma of Bombardier, “There are a line of seats available that can be chosen by the operator. This is typically the low recline one for high density seating”.
Enjoy the photos of this prim and proper bird! (And oh, don’t miss the ANVS control panel!)