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Nordic Aviation Sees Larger Turboprops Soon to Beat Fuel Costs

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May 4 (Bloomberg) -- Bombardier Inc. and Avions de Transport Regional, or ATR, the only companies still building turbo-propeller passenger planes, will probably commit to larger models soon to help airlines beat fuel costs and overcome airport constraints, the world’s biggest turboprop lessor said.

Nordic Aviation Capital, based in Denmark, is the largest provider of turboprop planes for leasing to airlines, with a fleet of 160 aircraft including 86 planes built by ATR and 25 Q-Series planes from Bombardier.

The high cost of jet fuel and difficulty in obtaining landing and take-off rights, or slots, at major airports worldwide means regional airlines flying short routes will require turbo-propeller planes that can carry significantly more than the maximum 78 carried today by both the ATR72 and Bombardier’s Q-400, said Martin Moller, chairman and sole shareholder of Nordic Aviation Capital A/S.

“The turbo-propeller era is really about to take off,” Moller said in an interview in Toulouse, France. “With airport constraints, airlines need bigger planes for passenger operations, and does anyone think fuel prices are coming down? With a turboprop you can probably move about 50 percent more passengers with the same amount of fuel.”

Moller said he is urging ATR to offer a 90-seat plane to complement its 78- and 42-seaters “as soon as possible.” He said he would be willing to make a speculative order for 10 planes initially to help get the plane released and show ATR shareholders European Aeronautic, Defence & Space Co. and Finmeccanica SpA that the plane had strong support.

Development Costs

“I also think someone is probably seriously thinking about stretching a certain airplane as far as 110 seats,” Moller said. He declined to disclose the name of the company initially, though subsequently predicted that Bombardier would commit to a stretch of its 78-seat Q-Series.

Bombardier Chief Executive Officer Pierre Beaudoin said in 2006, when he was running the company’s aerospace unit, that Bombardier was looking at a possible stretch of the Q400 to as many as 95 seats.

ATR CEO Filippo Bagnato said yesterday that the company is still working up the business case for developing a larger plane, estimating the development costs at ”about half what it costs to develop a regional jet.” Bombardier has said its Cseries regional jet will cost about $3.3 billion to develop.

To contact the reporters on this story: Andrea Rothman in Toulouse, France at aerothman@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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