Order Includes NextGen Q400s... For Affiliates

When it comes to "say what?" news announcements, this one may be even more surprising than Northrop/EADS winning the Air Force KC-X contract. At least at first.

On Monday, Bombardier Aerospace announced SAS Scandinavian Airlines and three of its affiliate airlines signed firm orders for 27 regional jets and turboprops, and have taken options on an additional 24 aircraft. That's not the surprising part. What knocked our socks off, is the fact the order includes 14 new Q400 turboprops... despite SAS's well-publicized issues with its prior fleet of Q400s last year.

As ANN reported, SAS dumped the twin turboprop regional airliner from its mainline fleet on October 28, 2007... one day after the airline's third landing accident involving a Q400 in just over six weeks. In each of those accidents -- the first two of which occurred just four days apart -- the aircraft experienced problems with deploying their right maingear.

Despite the localized nature of the problem, Bombardier could not identify a single cause for all three failures. Separate investigations by the Danish government determined the first two incidents -- in Aalborg, Denmark on September 9, followed by another failure in Vilnius, Lithuania three days later -- were caused by a corroded bolt in each plane's landing gear assembly.

A November joint investigation by the European Aviation Safety Agency, Transport Canada, planemaker Bombardier and component manufacturer Goodrich determined the October 27 incident was not related to the first two incidents, however, and was not caused by a design flaw in the aircraft's right maingear assembly. A preliminary investigation singled out a loose rubber O-ring, which jammed and kept the gear leg from extending

SAS ultimately demanded close to $200 million in compensation from the planemaker, to be applied towards its order for CRJ900s. Last month, Bombardier said it was close to agreeing on terms with SAS for the problems... and on Monday, Bombardier said it, SAS, and landing gear manufacturer Goodrich had reached "a mutually satisfactory agreement -- the terms of which are confidential."

Well, perhaps not entirely confidential. Under terms of the deal announced Monday, Estonian Air of Tallinn, Estonia and SAS placed firm orders for 13 Bombardier CRJ900 NextGen regional jets, with options on 17 more, while Widerøe’s Flyveselskap A/S of Bodø, Norway and airBaltic of Riga, Latvia have ordered 14 Q400 NextGen turboprops, with options on seven more. (You'll note SAS declined to put its own livery on more Q400s -- Ed.)

The value of the combined firm orders based on CRJ900 NextGen and Q400 NextGen list prices is approximately $883 million US. The value of the orders could increase to approximately $1.75 billion if all options are exercised.

"The firm order for 27 aircraft will bring a rejuvenated premium product to our customers," said Mats Jansson, President and CEO, SAS Group. "The CRJ900 and Q400 NextGen aircraft are well-suited to our operations in Northern Europe, where our customers expect comfortable and environmentally friendly travel."

"We are proud to extend our long-standing partnership with SAS and its partner airlines," added Steven Ridolfi, President, Bombardier Regional Aircraft. "This order is not only a milestone in terms of size and value, but is a testament to the strength of our relationship. SAS has been a Bombardier customer for eight years, Widerøe for 50 years, and now we welcome airBaltic and Estonian Air to our family. We are also very pleased that SAS and its affiliates have chosen our NextGen family, both turboprops and jets, to augment their fleets."

The transactions increase firm orders for CRJ900/CRJ900 NextGen airliners to 242 aircraft, with 145 delivered at January 31, 2008. Q400/Q400 NextGen aircraft firm orders now stand at 296 aircraft, with 190 delivered as of January 31, 2008.

FMI: www.bombardier.com, www.flysas.com