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SAS Will Stop Using Q400 Planes After Crash Landing (Update3)
By Christian Wienberg and Niklas Magnusson
Oct. 28 (Bloomberg) -- SAS AB, Scandinavia's biggest airline, will stop using its Bombardier Inc. Dash 8 Q400 planes after three crash landings in six weeks made customers ``increasingly doubtful'' about the safety of the aircraft.
The 27 planes will cease flying immediately, the Stockholm- based carrier said today in a statement distributed via the Stockholm Stock Exchange.
The airline took the turboprops out of service yesterday for the second time in two months after an aircraft, whose landing gear failed to fully extend, crash-landed at Copenhagen airport. SAS grounded the Q400s on Sept. 12 after landing gear failed to lock on two planes in four days, also causing crash landings. They started phasing the planes back in from Oct. 4.
``It's an extremely sensible decision; I would say SAS did what they had to do,'' said Dan Solon, an independent airline analyst in Barcelona, by telephone. ``Airlines depend on passengers trusting the aircraft.''
There were no deaths or serious injuries in the accident yesterday, when flight SK2867 from Bergen, Norway, made an emergency landing at 4:55 p.m. local time. Police said fire trucks had covered the runway with foam before it touched down and ambulances were standing by.
On Sept. 9, a Scandinavian Airlines Q400 caught fire in Aalborg, Denmark, after its landing gear failed. Five of the 69 passengers were injured. On Sept. 12 part of the landing gear of an SAS Q400 collapsed after the plane touched down in Vilnius, Lithuania.
`Confidence Diminished'
``Confidence in the Q400 has diminished considerably,'' Chief Executive Officer Mats Jansson said in the statement. ``Our customers are becoming increasingly doubtful about flying in this type of aircraft.''
SAS said Oct. 3 it will claim at least 500 million Swedish kronor ($157 million) from Bombardier as compensation for lost revenue and damage to its reputation. Jansson told a Stockholm press conference today that SAS is having ``good discussions'' with Bombardier, which ``understands our arguments.''
SAS, which, according to Jansson, still has Bombardier aircraft of other models in its fleet, will attempt to lease alternative planes to limit cancellations, which today totaled 53.
``I consider this a strong move by SAS, but also a move that may become very expensive,'' Jacob Pedersen, an analyst at Aabenraa, Denmark-based Sydbank A/S, said in an interview broadcast by TV2 News. ``This is important for the survival of SAS.''
Staff Walkouts
Pedersen, who rates the shares `overweight,'' said the SAS share price ``will drop'' when the Scandinavian markets open tomorrow. SAS shares fell 1.7 percent Oct. 26 to 113.75 kronor, and were trading 2.4 percent below their level at the start of the year.
SAS stock has lost 27 percent of its value since its announcement Aug. 9 that profit was hit by strikes. The carrier had to cancel more than 2,000 flights this year as a result of staff walkouts in Sweden, Denmark and Spain, which cost it about 300 million kronor in earnings in the second quarter.
Bombardier is ``disappointed'' with SAS's decision given that the incident is still under investigation, the Montreal- based company said in a statement today. Bombardier has not identified a ``systemic landing gear issue'' and ``stands behind'' the Q400 aircraft.
``This is a massive blow to Bombardier,'' Solon said. ``One of their important customers has displayed lack of confidence in their product and that's the worst thing that can happen to an aircraft-maker.''
`No Relationship'
Yesterday Bombardier issued a statement saying ``there appears to be no relationship between this incident and previous SAS Q400 main landing gear incidents.'' It said it has advised all other operators of the accident ``but is not recommending changes to their normal ongoing Q400 flight operations.''
``The Dash 8 Q400 has given rise to repeated quality-related problems,'' John Dueholm, deputy CEO of SAS, said in the statement. ``We can now conclude that the aircraft does not match our passengers' requirements concerning punctuality and regularity.''
Austrian Airlines Group, which owns 10 Q400s, isn't grounding its planes, spokeswoman Livia Dandrea-Boehm said by telephone. Augsburg Airways, which operates six Q400s, and U.K. carrier Flybe, which owns 35, said before SAS announced it will stop using the aircraft that they weren't grounding planes either. Augsburg, contacted later, said it was too early to comment further.
The landing gear is made by Goodrich Corp., based in Charlotte, North Carolina. Spokeswoman Lisa Bottle did not return calls yesterday or today seeking comment.
Horizon Air, a regional unit of Seattle-based Alaska Air Group Inc., which has 33 Q400s, plans to continue flying its turboprop fleet, spokesman Bill Conniff said. The company has an order for 15 more aircraft to be delivered starting in Oct, 2008 and has no plans to cancel that order, Conniff said.
Frontier Airlines Holdings Inc., a Denver-based low-fare carrier, has received half of the 10 Q400s that its Lynx Aviation unit plans to use to serve small cities in the U.S. Rocky Mountain region. Joe Hodas, a spokesman for Frontier, did not immediately return phone and e-mail messages from Bloomberg for comment.
Porter Air, a Toronto-based startup with a fleet of four Q400s, is operating ``business as usual'' and has no plans to ground its aircraft, spokesman Brad Cicero said.
-- With reporting by Hugo Miller in Toronto, Christopher Donville in Vancouver, Oliver Suess in Munich and James Lumley in London, Editor: G. Collins (prb/srr/jws)
To contact the reporters on this story: Christian Wienberg in Copenhagen at [email protected] ; Niklas Magnusson in Stockholm at [email protected]
Last Updated: October 28, 2007 14:38 EDT
By Christian Wienberg and Niklas Magnusson
Oct. 28 (Bloomberg) -- SAS AB, Scandinavia's biggest airline, will stop using its Bombardier Inc. Dash 8 Q400 planes after three crash landings in six weeks made customers ``increasingly doubtful'' about the safety of the aircraft.
The 27 planes will cease flying immediately, the Stockholm- based carrier said today in a statement distributed via the Stockholm Stock Exchange.
The airline took the turboprops out of service yesterday for the second time in two months after an aircraft, whose landing gear failed to fully extend, crash-landed at Copenhagen airport. SAS grounded the Q400s on Sept. 12 after landing gear failed to lock on two planes in four days, also causing crash landings. They started phasing the planes back in from Oct. 4.
``It's an extremely sensible decision; I would say SAS did what they had to do,'' said Dan Solon, an independent airline analyst in Barcelona, by telephone. ``Airlines depend on passengers trusting the aircraft.''
There were no deaths or serious injuries in the accident yesterday, when flight SK2867 from Bergen, Norway, made an emergency landing at 4:55 p.m. local time. Police said fire trucks had covered the runway with foam before it touched down and ambulances were standing by.
On Sept. 9, a Scandinavian Airlines Q400 caught fire in Aalborg, Denmark, after its landing gear failed. Five of the 69 passengers were injured. On Sept. 12 part of the landing gear of an SAS Q400 collapsed after the plane touched down in Vilnius, Lithuania.
`Confidence Diminished'
``Confidence in the Q400 has diminished considerably,'' Chief Executive Officer Mats Jansson said in the statement. ``Our customers are becoming increasingly doubtful about flying in this type of aircraft.''
SAS said Oct. 3 it will claim at least 500 million Swedish kronor ($157 million) from Bombardier as compensation for lost revenue and damage to its reputation. Jansson told a Stockholm press conference today that SAS is having ``good discussions'' with Bombardier, which ``understands our arguments.''
SAS, which, according to Jansson, still has Bombardier aircraft of other models in its fleet, will attempt to lease alternative planes to limit cancellations, which today totaled 53.
``I consider this a strong move by SAS, but also a move that may become very expensive,'' Jacob Pedersen, an analyst at Aabenraa, Denmark-based Sydbank A/S, said in an interview broadcast by TV2 News. ``This is important for the survival of SAS.''
Staff Walkouts
Pedersen, who rates the shares `overweight,'' said the SAS share price ``will drop'' when the Scandinavian markets open tomorrow. SAS shares fell 1.7 percent Oct. 26 to 113.75 kronor, and were trading 2.4 percent below their level at the start of the year.
SAS stock has lost 27 percent of its value since its announcement Aug. 9 that profit was hit by strikes. The carrier had to cancel more than 2,000 flights this year as a result of staff walkouts in Sweden, Denmark and Spain, which cost it about 300 million kronor in earnings in the second quarter.
Bombardier is ``disappointed'' with SAS's decision given that the incident is still under investigation, the Montreal- based company said in a statement today. Bombardier has not identified a ``systemic landing gear issue'' and ``stands behind'' the Q400 aircraft.
``This is a massive blow to Bombardier,'' Solon said. ``One of their important customers has displayed lack of confidence in their product and that's the worst thing that can happen to an aircraft-maker.''
`No Relationship'
Yesterday Bombardier issued a statement saying ``there appears to be no relationship between this incident and previous SAS Q400 main landing gear incidents.'' It said it has advised all other operators of the accident ``but is not recommending changes to their normal ongoing Q400 flight operations.''
``The Dash 8 Q400 has given rise to repeated quality-related problems,'' John Dueholm, deputy CEO of SAS, said in the statement. ``We can now conclude that the aircraft does not match our passengers' requirements concerning punctuality and regularity.''
Austrian Airlines Group, which owns 10 Q400s, isn't grounding its planes, spokeswoman Livia Dandrea-Boehm said by telephone. Augsburg Airways, which operates six Q400s, and U.K. carrier Flybe, which owns 35, said before SAS announced it will stop using the aircraft that they weren't grounding planes either. Augsburg, contacted later, said it was too early to comment further.
The landing gear is made by Goodrich Corp., based in Charlotte, North Carolina. Spokeswoman Lisa Bottle did not return calls yesterday or today seeking comment.
Horizon Air, a regional unit of Seattle-based Alaska Air Group Inc., which has 33 Q400s, plans to continue flying its turboprop fleet, spokesman Bill Conniff said. The company has an order for 15 more aircraft to be delivered starting in Oct, 2008 and has no plans to cancel that order, Conniff said.
Frontier Airlines Holdings Inc., a Denver-based low-fare carrier, has received half of the 10 Q400s that its Lynx Aviation unit plans to use to serve small cities in the U.S. Rocky Mountain region. Joe Hodas, a spokesman for Frontier, did not immediately return phone and e-mail messages from Bloomberg for comment.
Porter Air, a Toronto-based startup with a fleet of four Q400s, is operating ``business as usual'' and has no plans to ground its aircraft, spokesman Brad Cicero said.
-- With reporting by Hugo Miller in Toronto, Christopher Donville in Vancouver, Oliver Suess in Munich and James Lumley in London, Editor: G. Collins (prb/srr/jws)
To contact the reporters on this story: Christian Wienberg in Copenhagen at [email protected] ; Niklas Magnusson in Stockholm at [email protected]
Last Updated: October 28, 2007 14:38 EDT
