Turboprop

Market Report
Exploring Future Technology
June 2023 | Angus von Schoenberg
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to operators and investors worldwide in the regional sector.

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 Turboprop Market Report | 3

Contents

1 Introduction and Scope 10

2 Summary Specific Ations, Performance, Economics & Developments 12

2.1 Development Timeline 12
2.2 Specifications 13
2.3 Range 22
2.4 Performance 23
2.5 Economic Comparison 24
2.6 Discussion of Performance & Economic Comparison points 29
2.7 Emissions 30

3 Market Review 32
3.1 Deployment of Turboprops 32
3.2 Numbers in Service Update 34
3.3 Delivery Profile 34
3.4 Firm Order Backlog 35
3.5 Future Turboprop Forecast 38
3.6 Turboprop Operator Base 39
3.7 Geographical Dispersion 42
3.8 Operator Segmentation 43

4 Large Turboprop Aircraft Owned by Lessors 44

4.1 Comparative Lessor Penetration 44
4.2 Turboprop Leased Fleet Review 44

5 Market Availability and Demand 47

5.1 Demand and Supply Drivers 47
5.2 Large Turboprop Availability - Aircraft in Storage 47
5.3 Placement of Used Aircraft 49
5.4 Risk Factors 50

6 TrueNoord CMV and FV Assessment 51

6.1 General Trends 51
6.2 New Value Trends 52
6.3 Used Turboprop Values 53
6.4 Lease Rate Trends in Market 54

The information and any analyses contained in this document are taken from, or based upon, information obtained by TrueNoord from publicly available sources
as well as information generated from TrueNoord fleet data and other sources the completeness and accuracy of which has not been independently verified,
and cannot be assured by TrueNoord. This document is not intended to, and should not be construed as, representing the policies, positions or views of TrueNoord.
The statements contained herein are based solely upon the opinions of the author and the data and information available to the author at the time of publication.

2023 TrueNoord
 4 | Turboprop Market Report

TrueNoord Fleet
3 ATR 72-600
 Turboprop Market Report | 5

Executive Summary

Current Turboprops

Strengths Weaknesses
• Best operating economics of any sub 150 • Perceived lower on-board product
seat aircraft on sectors up to 300nm. quality and reduced on-board
baggage capacity.
• Optimised for performance driven
missions e.g. short runways. • Lower appeal to network carriers
compared to regional jets for hub
• Increasingly well diversified global
and spoke operations particularly in
operator base.
US market.
• Much improved acceptance of this
• Limited range capability.
asset class among lessors and finance
community. • Lack of significant technological
advancement in this century
• Long economic useful life.
particularly in relation to power plant.
• Best environmental footprint of any
• Little scope to stretch existing
aircraft class for short sectors not
airframes to meet demand for
only due to attractively low carbon
larger aircraft.
emissions but, unlike jet aircraft,
turboprops do not generate contrails.

Opportunities Threats
• Significantly underserved markets ideal • Future hybrid and electric powered
for turboprops remain in Asia, Latin aircraft will impact existing turboprop
America and Africa. fleets before any other types.
• Any continued fuel price increases or • Continued technological and economic
new taxes on aviation fuel imposed at improvement of regional jet aircraft
national or supra-national level will could erode benefits of large turboprops.
increase the attractiveness of turboprops
• Introduction of a new 90-100 seat
relative to other types.
turboprop could reduce the appeal of
• Represent the main candidate airframes current generation 70-90 seaters.
for hydrogen propulsion system retrofit.
6 | Turboprop Market Report

Key Attributes & Market Position of ATR and Dash 8-400 Turboprops

ATR42
• Originally a 42 seater, but for many years the standard capacity has been 48
seats.
• Currently the only in-production 40-50 seat turboprop. Deutsche Aircraft
D328Eco, despite its smaller capacity, could become a competitor over the
coming years.
• Newest variant the ATR42-600S will give it a short take-off and landing capability
on 800m runways with reduced payload of 40 passengers.
• Well established and geographically spread network of support and training
facilities.
• Given total fleet of some 170 aircraft, the type has a remarkably broad operator
base of around 60 carriers across all -500 and -600 variants. Six ATR42-600
operators so far.
• Only one ATR42 operator has more than 10 aircraft.
• Reasonable order book of 30 units relative to its total market size.
• Relatively few (6) newer generation ATR42-600s currently inactive.
• Average fleet age of ATR42-600 is about 5 years whereas the average age for
the total ATR42 fleet is considerably greater.
• Some 30% of all ATR42s are leased. NAC with 28 aircraft is its largest lessor.

ATR72
• Standard capacity varies between 68 and 72 seats, but more seating enabled
by new generation slim seats allows for a 78 seat high capacity version, which
operates exclusively in Asia.
• Currently the only in-production large turboprop.
• Well established and geographically spread network of support and training
facilities.
• The most successful large turboprop programme in history as measured by
size of fleet and outstanding orders. Over 1,200 aircraft built of which, the latest
ATR72-600 in service since 2011, has over 600 units in operation or on firm order
(139 orders as at Dec 2022). Historically most other turboprop programmes never
sold more than 350 units.
• The operator base is well diversified with in excess of 80 ATR72-600 operators
alone particularly in the APAC region. There are six operators with more than 20
aircraft representing some 25% of the global fleet.
• Asia and Europe are the two largest markets for the type.
• The ATR72 is well established in the leasing community with 58% of ATR72-600s
owned by lessors and 38% of ATR72-500s. NAC and Falko are currently the largest
lessors of the type.
• Although many aircraft are recorded as stored, there are few airworthy examples
available on the used market. The remainder require substantial maintenance
related investment.
• Newest version is the ATR72-600 are powered by Pratt & Whitney Canada
PW127XT engine, first delivered to Air Corsica in Dec 2022. The new engine offers
longer maintenance intervals and an incremental fuel-burn improvement of up
to 3%
• Next generation ATR72-600EVO are under development and will have
incremental evolutionary efficiency improvements that may include the so
called “mild-hybridisation” of engines.
 Turboprop Market Report | 7

Dash 8-400
• Standard capacity ranges from 78-82 seats. Some early examples have 74
seats. Extra capacity variants of 86 or 90 seats exist enabled by slim seats in
the Asian market.
• Launched in 2008, the NextGen (NG) version featured an upgraded interior
including larger overhead bins and an increased design weight.
• The aircraft is currently out of production following the closure of its Final
Assembly Line (FAL) in Downsview. De Havilland have plans to develop a new
FAL in Calgary, but this depends on future demand.
• The aircraft offers stronger performance characteristics than the ATR72 with
greater speed (if required), climb performance and range, due principally to
its larger more powerful engine. Consequently, the aircraft is often favoured
over the ATR in mountainous or hot and high regions including Africa.
However, the aircraft has higher operating costs per seat than the ATR72
particularly in relation to maintenance of the PW150A engine, which has a
shaft horsepower output of over double that of the PW127.
• This aircraft has been the most successful Dash 8 programme to date with
around 575 aircraft delivered.
• The operator base is reasonably diversified with 60 operators. However,
the fleet is more concentrated. The ten largest operators with more than 20
aircraft account for nearly half the fleet.
• Geographical fleet dispersion is good in North America and Africa and
reasonable in Asia. Its European footprint is declining.
• The aircraft is established in the leasing community with 40% of all Dash
8-400s owned by lessors. NAC, Falko and Aergo are the largest lessors of
the type.
• There are more used aircraft available than ATRs. However, a substantial
proportion require substantial maintenance related investment and it is likely
that some, particularly older examples, may not go back into service.
8 | Turboprop Market Report

Future Technology Aircraft Prospects

• New technology aircraft with either hydrogen or electric or hybrid propulsion systems are under increasingly
advanced stages of development.
• Such aircraft will first enter service in the 9-30 seat regional commuter category in the hybrid electric segment.
• Hydrogen powered aircraft may first become available on ATR72 sized aircraft, but are likely to have reduced
payload and/or seating capacity.
• Other than a 9-seater Eviation Alice, a Zeroavia powered 19 seat Dornier 228 and a Universal Hydrogen powered 40
seat Dash 8-300, no regional aircraft prototypes have yet flown and initial test flights were only for about 10 minutes.
• Some of the new technology aircraft OEMs are projecting entry to service dates from as early as late 2025.
• However, the final design specification for any of the aircraft has yet to be frozen.
• Once the final design of any new aircraft is settled and prototypes are constructed, the main certification process
can begin. Certification of any new aircraft, even when based on proven conventional technology usually takes
several years.
• The new technology aircraft OEMs are all start-up companies without a developed support infrastructure
comparable to established aircraft manufacturers.
• In order for new technology aircraft to be successful the necessary hydrogen and or power supply needs to be
available at enough airports.

Current Generation Turboprop Values and Lease Rates

Values
• New ATR72-600 values are in the region of US$21 million.
• The newest Dash 8-400 values of aircraft manufactured in 2021 are in the range of US$19.5 million.
• Values for used ATR72-600 began to recover during 2022 as the supply of airworthy good condition aircraft began
to diminish considerably.
• Values for used Dash 8-400s remain weak although these have also begun to recover mainly for newer NG vintages.
• Due to its more concentrated operator profile the Dash 8-400 has suffered more from airline bankruptcies and the
decision of some carriers in Europe and North America to dispose of their fleets to a greater extent than the ATR.
• Older 1990s ATR72-500 vintage values have stabilised to serve the cargo conversion market.
• The long-term impact of the sale of the Dash-8 programme by Bombardier on values remains uncertain. Concerns
remain with respect to the future of the programme and also with the support of the incumbent fleet by De Havilland
and P&WC. However, the Dash 8 is well regarded by loyal operators as a robust aircraft and previous Dash
8-100/200/300 models remained in strong demand after production had ceased.
Lease Rates
• New ATR72-600 lease rates are in the range of US$170,000 per month. Although naked, almost-new aircraft, from
past forward orders have been recently offered at lower rates.
• Like values, lease rates for used ATR72-600s have begun to increase and this is now confirmed by all appraisers.
• New ATR42-600 values are in the region of US$130,000.
• Lease rates for the Dash 8-400 have also begun to recover in the region of US$160,000 for recent 2021 examples,
down to US$70,000 for 2010 vintage examples.
• Insufficient cost and pricing data is available to indicate the values and lease rates for any of the new generation
aircraft that we believe will not come to market at any scale before 2030.
Turboprop Market Report | 9

TrueNoord Fleet
3 Dash 8-400
10 | Turboprop Market Report

1 Introduction & Scope

Aircraft Types covered in this Report

ATR72-600
The French-Italian ATR72 was first launched in the late 1980s as the ATR72-200. The -200 series was superseded by the
-500 series in 1995, which, in turn, was further developed into the latest -600 series variant from 2011. Initially the ATR72
was a 68-72 seat aircraft. The standard European versions are now 70-72 seats, but today a high density 78 seat version
is also available and operates exclusively in Asia.
The ATR72 is the world’s most popular current generation turboprop and is considered to be the work horse of a majority
of regional airlines outside North America where the regional market is dominated by jet powered aircraft. The ATR72-
600 has become the dominant regional aircraft in Asia over the past decade.
ATR42-600
While the first prototype aircraft was the ATR42-200, very few 200 variants entered commercial service and the
standard initial version became the ATR42-300. The first in service aircraft pre-dated the ATR72 with service entry
in 1985. Prior to the current ATR42-600 the platform had more intervening variants than its larger sibling comprising
-320, -400 and -500 versions each of which embodied certain upgrades. The ATR42-600 has 48 seats in its standard
configuration. Its next forthcoming iteration is the ATR42-600S to enable Short Take-Off and Landing (STOL) capability.
Dash 8-400
This aircraft (previously branded by Bombardier as the DHC8Q-400 or simply the Q400) is the world’s largest turboprop
commercial airliner. First entry to service was in 1998 with SAS when the standard configuration was 74 seats. Today the
densest version has increased to 90 seats with SpiceJet in India, but more commonly the aircraft has 78-82 seats.
The aircraft was developed in the 1990s as a high-speed turboprop (360 knots high speed cruise compared to 270
knots high speed cruise for the ATR72) in order to compete with regional jets on shorter sectors but with the aim of
achieving turboprop economics particularly in relation to fuel burn. At the time, Bombardier believed such an aircraft
would perfectly complement its CRJ regional jet range, which was optimised for thin markets on longer sectors in excess
of ninety minutes. While the Dash 8-400 has not seen the same commercial success as the ATR72, it has nevertheless
sold in excess of 500 aircraft, a similar volume to its discontinued smaller and earlier Q100/200/300 family. The Dash
8 programme is now owned by De Havilland after the completion of its sale by Bombardier earlier in 2019. Production
of the aircraft ceased in mid-2021 due to a lack of orders and a need to vacate its assembly line in Downsview, Toronto,
following the sale of the site to developers. In July 2022 De Havilland announced that it is exploring a new production
facility in Calgary to re-start production subject to demand and a sufficiently robust supply chain.
Future Technology Aircraft
There is a multitude of new technology aircraft projects many of which are still at a research and development stage
with no projected service entry timetables. This report cannot cover all such projects and will therefore primarily focus
on those where a commercial service entry year has been announced. This includes:
• Future variants of current generation aircraft including the ATR72EVO, which plans to adopt mild hybridisation to
enable an electric power boost for take-off and climb.
• Pure and hybrid electric powered aircraft ranging from the 9-seat Eviation Alice, the 19 seat Aura ERA, the 30-seat
Heart Aerospace ES30 to Maeve Aerospace’s all electric 44-seat Maeve 01. The all-electric Alice completed its first
test flight in September 2022, and the ES30 plan has evolved from a pure electric 19 seat aircraft to a larger hybrid
platform.
• Hydrogen powered retrofit programmes for current generation turboprop aircraft including those of ZeroAvia and
Universal Hydrogen. Both of these are currently undergoing trials on the Dornier 228 and Dash 8-300 prior to testing
on larger airframes such as the ATR72.
 Turboprop Market Report | 11

Scope
The previous Large Turboprop Report (June 2020) provided an overview of the 70-90 seat turboprop market primarily
covering the above referenced ATR72 and Dash 8-400. This revised and updated report will continue to primarily focus
on the ATR72-600 and Dash 8-400. TrueNoord already owns 21 ATR72-600s and since the previous report has also
acquired five Dash 8-400s. Over the last year, TrueNoord has also added 4 of the smaller ATR42-600 aircraft so this
report’s scope will broaden to cover the lower number of seats in this aircraft.
Furthermore, as all the new technology aircraft platforms involve lower seating capacities this report will also address
future generation turboprops from 19-90 seats with only cursory references to the smaller capacity aircraft such as the
Alice. (Short range urban air mobility projects often referred to as eVTOLs are excluded). 19 seats as a lower boundary
has been selected as this has historically been considered a size at which at least some airlines would adopt such
aircraft for commuter or small regional operations. It is also the size above which a cabin attendant is required. While
not covering the existing generation of turboprops below 50 seats, which have been out of production since before this
century, some references are required in addressing the new technology platforms.
For the in-service aircraft types, this report will examine aircraft characteristics, applications, market penetration, and
operating economics, as well as addressing the current dynamics in values of these aircraft which continue to see some
variety of values from the appraisal community.
With respect to future technology, the report will examine characteristics to the extent that these are known, the possible
timelines for entry to service, technical, and certification challenges remaining. Any initial operating cost data available
will be examined along with a review of the commitments placed so far by potential operators.

Embraer’s Energia H2 Gas Turbine E50-H2GT

12 | Turboprop Market Report

2 Summary Specifications, Performance,

Economics and Developments

2.1 Development Timeline

Current Generation Aircraft
The ATR comprises a current generation two aircraft family: the ATR42-600 and the ATR72-600. The programme was
launched in 1984 as the 42 seat capacity ATR42-300 and followed in 1988 by its larger 68 seat capacity ATR72-200 sibling.
These aircraft were powered by Pratt & Whitney Canada PW120/121 and 124 series engines with four bladed propellers.

From 1996 onwards the family was substantially upgraded with the current generation of PW127 engines with six bladed
propellers and marketed as the ATR42/72-500. The ATR72 was also offered with increased capacity of 72 or 74 seats.
Other developments at the time included improved performance and a higher maximum take-off weight. During this
period other turboprop manufacturers, including Saab and Fokker, ceased production and Bombardier launched a
stretch of the DHC8-300, which became the DHC8Q-400 (now branded the Dash 8-400) and is the only competitor to
ATR. The timeline of both the Dash-8 and the ATR variants are shown in Figure 2.1.

In 2008 ATR launched the current -600 generation, which first went into service in 2011. For a period of some 12 months
both the -500 and -600 were produced in parallel for those customers seeking to maintain a consistent -500 fleet.

By contrast, the Dash 8-400 is a substantial redevelopment rather than just a stretch of the previous Dash 8-100/200/300
family of 37-50 seat turboprops. To accommodate the larger capacity of the aircraft, the previous aircraft was not only
stretched by 6.8m compared to the Dash 8-300, but has a larger wing, is constructed with newer generation lighter
materials, but most importantly is powered by the PW150A engine that was designed for this aircraft and any future
stretched versions.

Both ATR and Bombardier have considered larger 90-100 seat turboprops. However, Bombardier (previous owner
of the Dash 8 programme), whose resources were focused on the former C-Series (now the A220), concluded that a
further stretch of the aircraft posed significant design risks and shelved the Q400X programme. Subsequently ATR’s
Italian shareholder continued to push for a larger aircraft, but Airbus as the other main shareholder was against a new
turboprop so that this project was also abandoned less than a year later than the Q400X.

Earlier in 2022, De Havilland officially paused production of the Dash 8-400 because the final assembly line site in
Downsview had been sold. Depending on future demand, production may recommence in Calgary. This means that ATR
remains as a near monopoly supplier of 48-78 seat turboprops for the near-term future, although Embraer has been
considering a 90 seat aircraft.

Figure 2.1: ATR42/72 and Dash8-400 Production Timeline

1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022

ATR 42 ATR42-300/320 ATR42-500 ATR42-600

ATR72 ATR72-200 ATR72-500 ATR72-600

Dash 8-400 Dash 8-400 Dash 8-400 NG

Source: TrueNoord Insight

 Turboprop Market Report | 13

Future Technology Aircraft

For a number of reasons that will be addressed in subsequent sections of this report the timetable for Entry Into Service
(EIS) for new technology is uncertain, but the manufacturers of advanced projects in the commuter and regional segment
are currently projecting EIS in the second half of the decade. Figure 2.2 shows those projects which have publicly
announced an EIS date. There are also other concept aircraft including Embraer’s 19 and 30 seat hybrid Energia for an
estimated EIS in the early 2030s, but this is not yet a committed development programme and is therefore considered
out of scope for this report. Maeve Aerospace has also launched a concept for an all-electric 44-60 seat regional aircraft
and currently projects service entry in 2029.

Figure 2.2: Current Projected New Technology Aircraft EIS

<20 seats >40 seats Propulsion System

Universal Hydrogen NA 2025 Hydrogen fuel cell

ZeroAvia 2025 2026 Hydrogen fuel cell

Aura ERA 2027 NA Hybrid electric & turbogenerator

Heart ES30 NA 2028 Hybrid electric & turbogenerator

Maeve 01 NA 2029 All electric

Eviation Alice 2026 NA All electric

ATR72EVO NA 2030 Mild Hybridisation

2.2 Specifications
2.2.1 Configuration and access
Following the trend by all manufacturers to increase seating capacity, both ATR and De Havilland offer high-capacity
configurations enabled by the development of slim passenger seats. Their high-capacity variants are shown in Figure
2.3 with 78 seats for the ATR and 90 for the Dash 8. These versions are primarily aimed at the high growth Asian
continent where the average weight per passenger with baggage is lower than Europe or North America.

In other parts of the world, the standard configuration remains at 70/72 seats for the ATR and 78/82 for the Dash 8
(Figure 2.4) the latter of which also has 74 and 76 seat versions.

The ATR42-600 as shown in Figure 2.5 has a standard capacity of 48 seats. From late 2022 ATR also offers a 30-seat
configuration with additional cargo capacity or a 34” pitch variant. As this version matches its recent certification in
China for a maximum of 30 seats, this aircraft can be aimed at that market.
14 | Turboprop Market Report

Figure 2.3: ATR72-600 and Dash 8-400 High-Capacity Configurations

ATR72-600 78 seats SINGLE CLASS @ 28”

Dash 8-400 90 seats SINGLE CLASS @ 28”

Source: TrueNoord Intelligence, ATR & De Havilland

Figure 2.4: ATR72-600 and Dash 8-400 Standard Configurations

ATR72-600 72 seats SINGLE CLASS @ 29”

Dash 8-400 78 seats SINGLE CLASS @ 29”

Source: TrueNoord Intelligence & ATR

Figure 2.5: ATR42-600 Configurations

ATR42-600 48 seats SINGLE CLASS @ 30”

ATR42-600 30 seats SINGLE CLASS + 700kg additional cargo

Source: TrueNoord Intelligence, ATR & Jambojet

 Turboprop Market Report | 15

Access
From an aircraft servicing perspective, the passenger door is located at the rear of the ATR while the Dash 8 has
conventional front access. This means that airbridges cannot be attached for rear boarding to the ATR. While
airbridge access is not used for turboprops in most of the world, North America is the exception. This, in combination
with its higher 25,000ft operating ceiling and greater on-board luggage capacity, is a major reason why the Dash
8 has traditionally been favoured over the ATR in that market. Furthermore, since most US carriers offer first class
seating even in their regional aircraft operations and these seats are at the front of the aircraft, rear boarding
presents logistical complexity.

Future Technology Aircraft

As yet there are no publicly available seating lay-outs for these aircraft. However, a schematic of the hybrid electric
ES30 shown in Figure 2.6 is available. This recently revised design is to accommodate 30 passengers. Other electric
hybrid commuter/regional airliners include the ERA by Aura, which is planned as a 19-seater, and the Maeve 01 as
an all-electric 44 seater. For completeness, other electric aircraft projects below 19 seats and largely outside the
scope of this report include: Eviation Alice (9 seats); Ampaire Tailwind (9 seats); Zunum Aero ZA10 (12 seats) and the
Faradair Bio Electric Hybrid (18 seats). Larger capacity projects include Embraer’s hybrid electric Energia E19/E30-HE
(19-30 seats).

Figure 2.6: Heart Aerospace ES30

Source: Air Insight

Some new technology companies are offering electric propulsion powered by hydrogen. Universal Hydrogen is
developing retrofit options on ATR and Dash 8 airframes in which hydrogen capsules are stored in part of the rear
cabin such as shown in Figure 2.7. This would involve moving the rear pressure bulkhead forwards and reducing the
number of available seats for which the full support of the OEMs would be needed. For example, in the case of the
ATR72-600, this would leave 56 seats. By contrast, ZeroAvia proposes to maintain the existing seat configuration
and create hydrogen storage capacity in a combination of underwing pods, in the wings and above the fuselage.
In addition, following a two-year co-operation between Britten-Norman and Cranfield Aerospace Solutions, both
have recently announced a merger to accelerate the development of hydrogen fuel-cell powered B-N Islanders.
16 | Turboprop Market Report

Figure 2.7: Universal Hydrogen Storage Capsule Schematic Dash 8-300 & ATR72

Source: Universal Hydrogen

2.2.2 Principal specifications and weights

Current Generation Aircraft
The principal weights and specifications associated with the relevant aircraft are shown in Figure 2.8. Since the capacity
of the aircraft has been increased, their full weights have also risen. This impacts both the range and runway
performance of the Dash 8 as shown.

Figure 2.8: Specifications Comparison

Variant AT42-600 AT72-600 ATR72-600 Dash 8-400 Dash 8-400(EC)

MTOW 18,600kg 22,500kg 23,000kg 29,583kg 30,481kg

Max. payload 5,250kg 6,718kg 7,500kg 8,386kg 10,125kg

Engines (2x) PW127XT/M PW127XT/M PW127XT/M PW150A PW150A

Range 726Nm 740Nm 740Nm 1,140Nm 740Nm

Take off Distance 1,107m 1,367m 1,367m 1,425m 1,573m

Landing Distance 966m 1,068m 1,068m 1,289m 1,346m

Max Pax Capacity 48 68-72 70-78 78-82 86-90

 Turboprop Market Report | 17

Differences between standard and high-capacity variants

The high capacity ATR72-600 is essentially an upgraded standard aircraft which incorporates higher weight and
payload. Although the weight upgrades can also be applied to lower capacity versions, if required, by the operations
of individual airlines. Unlike the Dash 8, the high-capacity ATR does not have any range or performance penalties.
Although the reduced range performance of the Dash 8 has no material impact on live operations, turboprop services
requiring the maximum range offered by that aircraft type are negligible.

ATR42-600S STOL
The ATR42S “Short take-off and landing” STOL aircraft is a new variant of the standard ATR42-600, which will enable
it to take-off and land from airports with runways that can be as short as 800m. As there are currently no 30+ seat
aircraft that have this performance capability this version is designed to address that market, which is currently only
served by ageing out-of-production aircraft such as the Dash 8-100/200. These aircraft are now all above 20 years
old and the average fleet age is closer to 35 years.

The ATR42-600S requires several modifications (See Fig. 2.9) including a larger rudder and steep approach capability
and will still have payload limitations to 33 passengers on an 800m runway. Payload improves considerably with
incremental additional runway length. At 900m the ATR42-600S is limited to 42 passengers.

Figure 2.9: ATR42-600S Modifications

Source: ATR
18 | Turboprop Market Report

Future Generation Aircraft

The precise specifications and weights of none of the future generation aircraft have been frozen, but certain aspects have
been published beyond the planned passenger capacities.

Preliminary weight estimates for the ES30 the ERA and the Alice are available. The ES30 is expected to have an MTOW of
20-21,000kg (FlightGlobal Sept 2022) and the Aura ERA will have an MTOW of 8,100kg. Its payload is expected to be in the
region of 2,000kg. By comparison, the smaller Alice will have a similar MTOW of 8,300kg and a payload of 1,130kg.

Numerous other projects are at a concept design phase both at all major existing OEMs and other new entrants. At the larger
end of this spectrum Maeve Aerospace has released preliminary weights for the Maeve 01 all-electric aircraft that is expected
to have an MTOW of 45,000kg and a payload of 4,965kg. Note that the MTOW of this aircraft is over double that of the similar
capacity ATR42 (Fig. 2.8), which illustrates one of the principal challenges faced by scaling all electric aircraft.

2.2.3 Engines & Future Propulsion

As in previous TrueNoord Insight reports, this section reviews current generation gas turbine engines that power existing
airframes. In addition, this report introduces electric propulsion for the next generation of propeller driven aircraft. This is
limited to electric propulsion (whether derived from batteries or hydrogen) as the remaining alternative of direct hydrogen
combustion is considered to be both further away in time and is applicable to larger aircraft outside the scope of this report.

Current Generation Gas Turbine Engines

ATR72 has always been powered by various derivatives of the PW 120 series. Today’s ATR42/72s are powered by the PW127F or
M variants. The PW127 is considered a mature engine and is the only remaining 120 series that is still in production. By contrast
the competing Dash 8 is equipped with the larger and more expensive PW150 power plant, which has had limited development
over recent years. The Chinese manufactured MA700 is also powered by the 150A.

While the PW127 power plant is mature it also has certain disadvantages. On the ATR72, the engine has reached its thrust
limit so that it cannot be materially adapted for markets that require a higher performance aircraft. There have been some
incremental modifications for hot and high operating conditions with an “N” variant offering a boost function. However, this
PW127N variant was only selected by Avianca to enable replacement of the Fokker 50. After leaving Avianca these aircraft are
likely to be de-modified as the secondary market prefers the standard “M” version.

As from December 2022, new ATR42/72s will be powered by an upgraded PW127XT engine as discussed in section 2.5 below,
but this engine will not enhance the performance of either aircraft. Instead, it will primarily offer maintenance interval and
cost advantages as well as an incremental 3% fuel burn benefit over the PW127M. The PW127XT can be retrofitted to existing
ATR42/72s and co-mingled with an M engine on the opposite side of the aircraft. The PW127M can also be upgraded to an XT,
which only makes sense during a full overhaul.

The principal benefits of the PW150A are that it can power the larger airframe and enables faster climb performance and
greater speed (see Fig 2.14). This enables both shorter sector times for the same distance and better performance at restricted
airports particularly in hot and high conditions.

However, there are also disadvantages. The faster cruise speed has limited value on typical 45-90 minute sectors by bringing
a limited 10-15 minute flight time improvement only. Many airlines do not consider this to be a material benefit. Secondly, the
larger power plant consumes more fuel than the PW127 and has considerably higher maintenance costs closer to those of
smaller jet engines than to the PW127. To save fuel, many operators have slowed the cruise speed in operation to under 300kts
from 360kts as this brings the trip fuel burn closer to that of the ATR72-600. Only by slowing the cruise speed and increasing
capacity closer to 90 seats can the Q400 compete with the ATR72 on fuel burn per seat mile (see section 2.6).

Future Generation Powertrains & Fuels

In a perfect world of zero emissions, aircraft of the future would be powered by electric motors from batteries stored in much
the same way as conventional fuel tanks in the wings or in the fuselage. While this is the long-term aim, suitable battery
technology for large airliners may still be decades away. Current lithium-based batteries have a power to weight ratio that is
orders of magnitude less than conventional fuel, so that the required battery weight to generate the same power level as a gas
turbine is far too high for any commercially sized aircraft to have a useful range. Battery technology, led by the automotive
industry (albeit now as much about cost reduction as performance), continues to develop but is still expected to take many years
to reach sufficient maturity and reduced weight for use in all electric aircraft. Given the limitations of batteries two alternative
pathways are currently favoured.
 Turboprop Market Report | 19

All Electric & Hybrid Electric Propulsion

Currently, many aircraft electrification projects are focused on either “more electric systems” in aircraft to reduce the power
required from the current engines or hybrid propulsion whereby smaller gas turbines would either be supplemented by
electric motors for certain phases of flight or would charge batteries in-flight to power electric motors. While some all-electric
propulsion projects including the Maeve 01 are under development the weight of current technology batteries required for a
useful mission length means that an MTOW of at least double that of a similar sized conventional aircraft is the result. This is the
prime driver that has led Heart Aerospace to pivot to a hybrid propulsion system comprising electric propulsion powered by a
combination of fewer heavy batteries and dual turbo-generators.

The “All electric” and “Hybrid and turbo-generator” concepts are shown in Figure 2.10. The hybrid concept shown is “in-series”
whereby the conventional engine (turbo-generator) provides electricity to power electric motors. Compared to conventional
twin engines, electric propulsion enables efficiency gains by allowing the distribution of power across multiple motors that
outweigh the losses associated with converting one form of power to another from the turbo-generators. This has become
the system adopted by the Heart Aerospace ES30 and the Aura ERA both of which have multiple motors on each wing.
An alternative parallel hybrid model is where energy to the propulsor is provided by an electric motor and a gas turbine
simultaneously. This is the strategy currently favoured by ATR in its EVO project (Fig. 2.11).

Figure 2.10: Hybrid & All Electric Propulsion Schematic

Motor(s)
Hybrid Electric &
Turbogenerator

Turboshaft Power
electronics
Electric
Bus
Generator

Fuel
Battery
Aircraft systems

Battery Motor(s)
Power
All Electric

electronics

Electric
Bus

Aircraft systems

Source: Adapted from Aerospace Engineering

The ATR72EVO announced in 2022 envisages mild hybridisation whereby an electric motor is integrated into a
smaller, as yet undefined, engine than the PW127 (Fig. 2.11) to boost power in the take-off and climb phases of flight.
In the above referenced “more electric systems” category ATR plans to use electric de-icing in place of boots filled
with bleed air from the engines as well as other aerodynamic improvements aimed at reducing the power needed
from the gas turbine engines. The net effect would be to substantially reduce the fuel burn and emissions of the gas
turbines. ATR have stated that the objective is to reduce fuel burn by some 20% with the EVO.
20 | Turboprop Market Report

Figure 2.11: ATR42/72 Evo Mild Hybridisation

Source: ATR

Hydrogen Fuel Cells for Electric Propulsion

Electric power can also be generated in a hydrogen fuel cell, which converts hydrogen and oxygen into electricity, which
in turn can power electric motors as shown in Figure 2.12. The introduction of a hydrogen fuel cells replaces the need for
a gas turbine in a hybrid electric aircraft and confers the benefits of removing traditional engines.

Figure 2.12: Fuel Cell/Battery Hydrogen Powered Propulsion System

Source: Unified International/Innovation Quarter published in “Aviation Week”

 Turboprop Market Report | 21

Some manufacturers including ZeroAvia and Universal Hydrogen believe hydrogen fuel cell technology is the optimum
route forwards. However, hydrogen and fuel cells come with their own remaining technical challenges including limited
range, significant heat by the fuel cell, and potential leakage of hydrogen on board and while in flight.

There are also nuances between the architecture of the Universal Hydrogen and ZeroAvia propulsion system.

• The refuelling process differs. Universal Hydrogen loads full capsules onto the aircraft after each flight and ZeroAvia
refuels the onboard tanks in a more conventional manner.

• To facilitate loading capsules the Universal Hydrogen system requires their location to be in the fuselage, which
means that several rows of seats are sacrificed. In an ATR72 this results in a 56-seat capacity. ZeroAvia stores the
hydrogen in under wing pods on its Dornier 228 test aircraft and proposes to house the hydrogen tanks outside the
cabin of the ATR72.

• Universal Hydrogen’s fuel-cell is planned to provide sufficient power output for all phases of flight including take-off
and climb so that no battery boost is required. ZeroAvia’s system includes a battery for peak power needs that is
then re-charged by the fuel-cell when less power is needed.

Both manufacturers acknowledge that in order for a hydrogen-based propulsion system to be practical, they need to
play a key role in the hydrogen distribution infrastructure. This may also include hydrogen production. Accordingly, both
manufacturers are proposing their respective refuelling infrastructure as an integral part of their product.

SAF & Other Fuels

Other future fuels include the use of ammonia and Sustainable Aviation Fuel (SAF). SAF is for now the key pathway for
the wider aviation industry to reach the necessary climate related goals for medium and long-haul travel as there are
no real alternatives. However, since the amount of SAF available for commercial aviation is currently not even sufficient
to provide 0.25% of the industry’s needs, the expansion of its supply to a materially useful level is urgent. If available at
scale, SAF could also address the needs of regional aviation with little change to fuel infrastructure.

Hydrogen can potentially also be combusted directly as a fuel without prior conversion to electricity via a fuel cell.
Direct combustion is currently believed to be more suitable for larger aircraft while fuel cell conversion is widely
understood to be better for smaller regional aircraft. Consequently, the large aircraft OEMs are more focused on direct
combustion and so these developments are outside the scope of this report. However, the supply of hydrogen is also very
limited and necessitates the development of new fuelling infrastructure in addition to dramatically increased supply.

ZeroAvia
22 | Turboprop Market Report

2.3 Range
Current Generation Aircraft
In its current standard configuration, the range of the ATR72-600 at 740nm with a full load is some 400nm less than the
Dash 8-400. However, as a range in excess of 1,000nm is very rarely a mission operated by any turboprop aircraft this
capability is of limited practical value. Most turboprops operate sectors of less than 400nm and generally the optimal
sector length is in the region of 200-300nm. Accordingly, the range penalty of adding up to 12 seats in the Dash 8-400
EC version is minimal for the vast majority of missions.

The ATR42-600 is predominantly used for even shorter sectors than its larger sibling or the Dash 8-400. It therefore has
more than adequate range capability (726nm). However, in its STOL version its range will be limited according to runway
length. On an 800m runway its range will be limited to 200nm with a maximum of 33 passengers and 300nm on a 920m
airfield length with a full passenger load.

Future Generation Aircraft

Although battery technology is both advancing and is likely to continue to do so, the current state of power storage
is such that pure electric aircraft have limited range even with a fourfold increase in energy storage capacity per kg.
Figure 2.13 shows that the range capability of aircraft on battery power only is likely to be limited to not much above
200nm. While useful this would enable, for example, the ERA to cover about 60% of sectors worldwide that are currently
served by 30-50 seater turboprops. In the case of the ES30 this would reduce to about 30% of this segment.

In order to increase range and reduce the heavy weight of the batteries both the ERA and the ES30 have adopted a
hybrid architecture whereby two turbogenerators will be fitted to the rear of the aircraft. These will enable the batteries
to be charged inflight to extend their range to enable a larger addressable market. Such a dual installation is necessary
to provide redundancy as a single unit would mean that both aircraft would be considered as single engine aircraft for
missions that rely on power from the turbogenerator.

However, the addition of turbogenerators does mean that neither aircraft can be considered as a zero emissions
product. Furthermore, the certification process for inflight power that is not operational from take-off is not yet clear.

Figure 2.13: Future Generation Aircraft Range

All Electric Hybrid Electric & Turbogenerator H2 Fuel Cell

Universal Hydrogen NA NA 550nm

ZeroAvia NA NA 500-1,000nm

Aura ERA 215nm 1,000nm NA

Heart ES30 108nm 216nm NA

Maeve 01 250nm NA NA

For the hydrogen powered retrofits the expected range is in the same region as the current gas turbine powered aircraft
to enable at least the same missions.
 Turboprop Market Report | 23

2.4 Performance
The ability to operate from restricted airports with short runways or in built-up areas is often a key attribute of regional
aircraft. Typically, this favours turboprops over regional jets. However, although both large ATR72 and Dash 8-400
turboprops offer superior performance characteristics on short runway airports compared to jets, both aircraft were
primarily built to offer increased capacity and competitive operating costs thereby compromising some potential
performance capabilities.

While neither large turboprop aircraft is a STOL performance aircraft capable of taking off from runways shorter than
1,000m, both can nevertheless achieve a respectable 1,300m take-off field length, which is sufficient for most restricted
airports that require high-capacity turboprops. However, several hundred airports with shorter runways exist in remote
areas or mountainous terrain. These can only be served by STOL aircraft such as the Dash 8-100/200 both of which are
now out of production. The ATR42-600S referenced in 2.2.2 is aimed at this market. Although a large part of the world’s
STOL airports are adequately served by smaller capacity 19 seat aircraft including the De Havilland Twin Otter or
Dornier 228, some do require the capacity offered by aircraft of this size.

Climb performance is also important where physical obstacles exist, such as high-rise buildings in cities or mountainous
terrain, as well as those areas where it is both hot and high. For example, while the ATR72 can operate from London City
airport the superior single engine climb performance of the Dash 8 enables it to operate optimally from there. Strong
climb performance can also be important to meet local area noise restrictions.

In the 300nm illustration in Figure 2.14, a 300nm mission profile from a remote airport to a major hub is shown where
the ATR72 takes 21 minutes to reach 20,000ft compared to 16 minutes for the more powerful competing Dash 8. The trip
time for the Dash 8 at high-speed cruise (360kts) is 57mins and 73mins for the ATR72 at 270kts. Not only can this provide
the bad weather avoidance as shown but is critical in hot and high areas such as Kenya, Ethiopia and parts of South
Africa where the ATR72 struggles to perform the required missions and the Dash 8 is the favoured option. However,
the performance benefit of the Dash 8 comes with an operating cost penalty compared to the ATR72 in the form of
increased fuel burn and maintenance costs although this remains less than for similar sized jet aircraft (see section 2.5).

Figure 2.14: ATR72-600 v Dash 8-400 Performance

16mins 25,000ft
Faster rate of climb Stronger weather avoidance

12mins 21mins 20,000ft

Better terrain
clearance
Typical Hub
remote Airport
small
airport

Typical 300nm turboprop sector

ATR72-600 Dash 8-400

Source: TrueNoord Intelligence adapted from Flying Engineer

24 | Turboprop Market Report

2.5 Economic Comparison

The elements of operating costs, apart from the aircraft capital portion, are often referred to as Cash Operating Costs
(COC). The elements that are driven by the aircraft itself are briefly reviewed below. Crew costs are a major COC
component but are not reviewed as these are broadly the same for any similar capacity regional aircraft. (Note that
crew costs for regional airlines are typically lower than those of mainline carriers, particularly in the U.S.) Similarly,
navigation and landing charges are not reviewed as these are largely driven by aircraft weight in many parts of the
world. The ATR72 is lighter than the larger Dash 8 in both absolute terms and on a per seat basis.

With respect to new technology aircraft there is, as yet, insufficient data available to make a meaningful comparison
with current generation aircraft. At a general level:

• The fuel costs for all electric propulsion systems should be substantially less than jet fuel, but hybrids will continue
to use some amount of conventional fuel. Eventually, as hydrogen production is scaled, its cost should reduce.

• In the long-term many expect the cost of jet fuel to increase, even before the application of carbon emissions
surcharges, which would shift the energy cost in favour of alternatives.

• Maintenance cost breakdowns are likely to look substantially different although the overall cost may or may not end
up as more attractive. For example, current technology battery life is expected to be in the region of 2,000FC, which
means these would need changing every 1-2 years of service. (Note these high-capacity batteries can be recycled or
repurposed for ground-based power storage). Furthermore, maintenance workscopes in next generation aircraft will
not be grouped into airframe and engine tasks. Aircraft of the future increasingly comprise a whole system in which
the electric motors are a relatively small component.

• It is likely that an incentive to decarbonise will include reduced navigation and airport fees so that any future COC
comparison will need to include this element, which heretofore are similar and cannot be materially impacted after
a current generation aircraft type has been chosen by any given operator.

2.5.1 Fuel Burn

The ATR72 has generally been considered to have lower operating costs than any of its competitor aircraft in a similar
seat capacity. In the example shown in Figure 2.15, the ATR72 burns some 850kg compared to 1,170kg for the Dash 8,
which represents a substantial 38% difference in the trip cost, this reduces to 20% on a per seat basis. However, at this
fuel burn the Dash 8 has a substantial speed advantage over the ATR by completing the journey 9 minutes faster and
only a few minutes slower than the regional jets. In practice some Dash 8-400 operators prefer to reduce fuel burn with
a slower cruise speed closer to that of the ATR72, which can erode the difference by around 50%.

Nevertheless, the ATR72-600 still has the lowest fuel burn of any regional aircraft on both a trip and a per seat basis
at this sector length. As the trip length increases (not shown), the faster speed of both the Dash 8 and the regional jets
begins to erode the fuel efficiency of the ATR72 so that the fuel burn advantage against the Dash 8 reduces to under 20%
on a per seat basis and under 50% for the regional jets.

Figure 2.15: Block Fuel Relative to ATR72-600 (300nm at US$0.90/kg fuel)

90%
80% E170 (78)

70%
60% E175 (86)
Fuel per seat

50%
ATR42-600 (48) CRJ900 (88)
40%
30%
Q400 (82)
20%
10%
ATR72-600 (72)
0%
ATR72 XT (72)
-10%
-20% 0% 20% 40% 60% 80% 100% 120%
Fuel per trip Source: TrueNoord Intelligence
Turboprop Market Report | 25

TrueNoord Fleet
5 ATR 72-600
26 | Turboprop Market Report

The ATR72-600 not only offers strong fuel efficiency benefits against regional jets, but also competes favourably with
mainstream single aisle jets where only the newest generation B737MAX and A320Neo offer similar or better fuel
consumption per seat on short sectors. However, the large jets do offer greater efficiency on sector lengths above
500nm.

As the CRJ and E-Jet families are both mature aircraft programmes, there is a wealth of data available from the
manufacturers (including the engine OEM), as well as direct experience from the TrueNoord fleet. Therefore, a
combination of OEM data, which has been cross checked with TrueNoord’s own internal experience, has been applied.
As a consequence, the scheduled tasks and hard time intervals are reasonably accurate, but the associated costs are
estimates, which have been slightly escalated to be conservative unless an actual published figure is used, as is the case
with engine LLPs.

2.5.2 Maintenance Costs

As the ATR72 and Dash 8-400 are both mature aircraft there is strong base maintenance data available from the
manufacturers (including the engine OEM) and third party maintenance shops. The cost estimates represent early 2023
data and are expected to increase due to cost escalation that is expected to continue to be high because of ongoing
inflationary pressures. The principal scheduled maintenance tasks, intervals and estimated costs are as follows:

Figure 2.16: Maintenance Comparison ATR72-600 & Dash 8-400

ATR 72 Dash 8-400

Airframe Checks (FH & FC)

Airframe maintenance heavy check (C-check) currently Airframe maintenance heavy check (C-check) intervals are
has an 8,000FH interval which has recently been escalated 8,000FH.
from 5,000FH. The estimated average C-check cost is
approximately US$5-20 per FH assuming that the event cost The estimated average C-check cost is in the region of
will not increase due to the greater interval. Note that the US$30-35 per FH.
increased interval may mean that the amount of tasks may
increase and therefore the event costs may be higher.

Airframe Calendar Checks

In addition, there are calendar-based inspections at 2, 4 In addition, there are calendar based inspections at 6, 9 and
and 8 years and a major structural inspection at 36,000 12 years with associated average costs of around US$8,000
cycles. The average cost of each 2-year interval check is per month respectively and a major structural inspection at
estimated at US$9-10,000 per month. The 36,000 cycle cost 40,000 cycles at an estimated cost of US$7.50 per FC.
is currently estimated at around US$15 per FC Historically,
calendar checks aligned reasonably well with C-check
intervals, but since these have been escalated these can be
out of phase thereby adding to both downtime and cost.

Landing Gear
After the engines, the landing gears are the single most expensive items on any turboprop aircraft and both
aircraft have gear related issues

Overhaul limits are 20,000 FC or 9 years. After the engines, Overhaul limits are 20,000 FC or 12 years for the nose gear
the landing gears are the single most expensive items on and 30,000 or 12 years for the main gear. Average overhaul
any turboprop aircraft Average overhaul costs are in the costs are in the region of US$5,000 per month.
region of US$6,000 per month.
 Turboprop Market Report | 27

Engines

While engines are maintained on-condition, the time on While engines are maintained on-condition and similarly
wing prior to any hot section inspection varies considerably to the 127 series, the time on wing varies considerably
according to the operating environment and can on average according to the operating environment. Typically,
vary between about 7,000 hours in benign conditions to as inspections are required between 4,500 and 7,000 FH so
little as 4,000 in, for example a sandy harsh environment. that the cost can range from US$175 to well in excess of
Accordingly costs can vary between USD$90-130 per USD$200 per engine FH.
engine FH. On average every second HSI requires additional
overhaul/refurbishment tasks to be performed due to the The reduction gearbox, usually overhauled simultaneously
higher level of disassembly required to replace LLPs with the refurbishment of the turbomachinery module will
(especially for HP Impeller) that also increases the total shop add about US$30 per engine FH.
visit cost by around US$40 per engine FH excluding the LLP
costs themselves.
The engine’s reduction gearbox module which is usually
overhauled simultaneously with refurbishment of the
turbomachinery module will add US$12 per engine FH.
For the PW127XT the manufacturer states that on-wing times
will be about 40% longer and the HSI and refurbishment
costs are expected to be greater so that the overall cost
saving per FH would be in the region of 20%.
However, only experience will show how well this engine
behaves in practice, especially in harsh environments.

Engine Life Limited Parts (LLPs)

P&WC, the engine OEM, often refers to LLPs as Low Cycle Fatigue parts life (LCFs)

LLP or LCF life costs are estimated to be in the region of LLP or LCF life costs are estimated to be in the region of
US$30 per engine FC. The majority of LLPs have a 15,000 US$37 per engine FC. The majority of LLPs have a 20,000 FC
FC ultimate life limit and the cycle rate includes PW&C’s and limit except the HP impeller at a lower 15,000 FC.
shop discounts.
On the PW127XT all LLPs that have a 15,000 FC limiter are
increased to 20,000 FC. Nevertheless, the cost per FC will
be in the region of US$37 per FC.

Propeller

Propeller hubs and blades have a hard time limit of Propeller hubs and blades have a hard time limit of
10,500 FH or 7 years. The estimated costs are around US$28 10,000 FH. The estimated cost is at around US$23 per engine
per engine FH. In practice, the blades commonly need repair FH. In practice, as with the ATR, blades commonly need
or replacement before that. damage related replacement before that.

APU

The ATR has no APU. Instead a propeller brake system While maintained on condition, the APU is estimated to have
allows the right hand engine to be operated in “Hotel” mode a shop visit at 5,500 APU hours at an estimated cost of
to provide ground power when needed. US$44 per APU hour.
28 | Turboprop Market Report

Comments on Maintenance
The above maintenance costs and intervals are based on fixed intervals except for engines, which are maintained on
condition. The actual maintenance costs will vary considerably according to how the aircraft are operated and the
environments in which they fly. For example, in harsh climatic environments the ATR is often less robust than Dash 8
aircraft and additional findings at major events can often increase the maintenance costs significantly.

Regarding engines there is considerable disparity between benign and harsh climates with several historical examples
of engine removals below 5,000 FC in less favourable environments.

ATR42-600 Maintenance Cost Differences

Despite the lower capacity, weight and thrust rating for its engines, its maintenance intervals and associated costs are
not significantly different to those of the ATR72-600. Both FH driven and calendar driven airframe costs are no more
than around 5% lower than those of the larger aircraft. With regard to engines, the lower thrust requirement for the
aircraft relative to the ATR72 would be expected to lead to longer on-wing times.

PW127XT Engine Upgrade

According to ATR and P&WC the new XT engine, the first of which were delivered to Air Corsica in late 2022, promises
significant maintenance cost reduction benefits not in terms of event costs, but rather in additional on-wing time of up to
40%. Increased on-wing time generates cost savings related to the frequency of required shop visits, but the event costs
also increase. Accordingly, P&WC estimates that the actual maintenance cost reduction over time is in the region of 20%.

The principal changes over the PW127M shown in Figure 2.17 relate to many of the durability issues that have affected
the higher rated PW120 series engines since inception. It also features durability improvements on many of the life limited
parts. This includes redesigned high and low pressure compressors and turbines as well as an enhanced power turbine
module at the rear.

Figure 2.17: Future Generation Aircraft Range

Source: P&WC and ATR

 Turboprop Market Report | 29

2.6 Discussion of Performance & Economic Comparison points

Both the ATR72-600 and the Dash 8-400 have operating costs that are lower than equivalent size category regional
jets per trip, but the difference is smaller on a per seat basis. The ATR72-600 has a number of benefits over its principal
competitor the Dash 8-400, but the latter also has some advantages:

ATR72-600
• The ATR72 has best-in-class operating economics despite its smaller size. In relation to operating costs - particularly
for fuel burn, weight-based airport charges, and maintenance costs - the cash operating costs per available seat
of the ATR72-600 have, to date, been better or equal to those of the Dash 8. Therefore, the majority of turboprop
operators that do not require the enhanced performance of the Dash 8 have opted for the ATR. Figure 2.18 shows
the cash operating costs, which exclude capital costs for the aircraft. This shows that ATR72-600 remains the most
attractive turboprop for most markets.

• The exception are those areas where superior performance characteristics mainly in terms of climb and operational
ceiling are needed (see Fig 2.14). This is important for those carriers operating at inner city obstacle restricted
airports, mountainous regions, or hot and high climates. For example, this drove carriers such as Widerøe in Norway
to select the Dash 8 aircraft and some African airlines, such as Ethiopian, to have done likewise.

• The ATR72 has now developed a high capacity 78 seat variant, which is well adapted to competitive Asian regional
markets in particular. Based on operating economics, the ATR is the undisputed leader across Asia.

• The ATR72 can be most efficiently applied to markets requiring a capacity of up to 78 seats whereas the Dash 8 is
only optimised from a capacity perspective for routes where a capacity from 78-90 seats is required and where
regional jets either cannot be operated or are economically inefficient.

Dash 8-400
• The Dash 8 has a faster cruise speed that enables it to compete with regional jets or more effectively complement
them. In regions where sector lengths can be long such as certain North American markets this can favour the
Dash 8 and provide greater operational flexibility.

• In practice, some operators have not selected the Dash 8 for its speed benefit, but for the extra capacity and a
more jet-equivalent product. These carriers often operate them at a slower long-range cruise (approx. 300kts) to
minimise fuel consumption.

• The stronger performance characteristics of the Dash 8-400 make the aircraft more suitable for restrictive
environments including hot and high terrain.

• However, although Dash 8-400 production has been paused, a 90 seat EC version of the Dash 8 operates at
SpiceJet with 12 additional seats compared to the ATR. This means the seat costs of both have converged.

Figure 2.18: Direct Operating Costs Relative to ATR72-600 (300nm sector at US$0.90/kg fuel)
35%
ATR42-600 (48)
30%
25%
20%
COC per seat

15%
E170 (78)
10%
E175 (86)
5% Q400 (82)
ATR72-600 (72)
0%
CRJ900 (88)
-5%
ATR72 XT (72)
-10%
-20% -10% 0% 10% 20% 30%
COC per trip Source: TrueNoord Intelligence
 30 | Turboprop Market Report

2.7 Emissions
Prior to the COVID-19 pandemic, aircraft emissions had already become a major industry concern and this has now
returned to the forefront. As the principal concern relates to CO2 emissions, Figure 2.19 shows carbon emissions for the
subject aircraft on a per seat per nm basis over a 300nm sector. For each aircraft the number of seats from which the
per seat calculation is derived is also shown. Carbon emissions are a function of fuel burn. For each kg of fuel consumed,
a hitherto generally accepted multiplier of 3.16kg of CO2 per kg of fuel is applied (Source: ICAO). However, this multiplier
is based upon emissions generated by burning fuel only and ignores those generated from extraction of that fuel and
processing to its usable form. This can be described as “tank to wake” related emissions.

An alternative approach to measuring emissions that includes the impact of extraction, refining and transport of fuel to
where it is needed is increasingly attracting favourable attention from both industry stakeholders, policy makers and
climate action organisations alike. In an aviation context this means adopting a higher multiplier of 3.83kg of CO2 per kg
of fuel. Both approaches are shown in Figure 2.19 and the latter is described as “well-to-wake” emissions.

While the well-to-wake approach leads to higher emissions it does have a number of benefits for comparative purposes:

• When Sustainable Aviation Fuel (SAF) is introduced in meaningful amounts, the production emissions can be
appropriately accounted for according to the different types of such fuel.

• For alternative future fuel types including electricity and hydrogen their production and distribution related
emissions can be included (for example, electric power involves few emissions, but its production unless from
renewables may not).

• Where emissions from flying are compared to other forms of transport where the source of the power is often
disaggregated from its production emissions (e.g. electric power for trains) only a well-to-wake equivalent
approach can yield comparable results.

As is evident from Figure 2.19, turboprops have relatively low emissions per seat per km compared to similar sized
regional jets reflecting the lower fuel burn of the propellor driven engines as previously discussed in section 2.5.1.
Furthermore, on short sectors of up to around 250-300nm, the ATR72-600 in particular has similar emissions per seat
compared to the newest generation A320Neo and 737Max aircraft. In Europe, where average sector lengths are shorter
than North America, such a 300nm sector is more typical so that in some cases greater frequency can be offered with
a 70-seat turboprop without materially compromising operating economics or emissions. On longer average sectors,
the speed differential erodes both the economics and passenger acceptance of the turboprops so that in much of North
America jet aircraft are generally preferred.

Figure 2.19: C02 Emissions in kg Per Seat Per nm (300nm Sector)

737Max 8 180 seats

A320Neo 180 seats

Other Aircraft

E175 86 seats

E170 78 seats

CRJ900 86 seats

Dash 8-400 82 seats

Turboprops

ATR42-600 48 seats

ATR72-600 72 seats

0.060 0.080 0.100 0.120 0.140 0.160 0.180 0.200 0.220 0.240 0.260 0.280

CO2/seat/nm – Well to wake CO2/seat/nm – Tank to wake

Source: TrueNoord Intelligence & IBA
 Turboprop Market Report | 31

For new technology aircraft under development no fuel burn or emissions data is yet available although most of the
impetus for future aircraft designs is driven by the desire to reduce or eliminate harmful gases. An all-electric aircraft
would have zero emissions if the tank to wake equivalent measure was adopted, but unless all the power came from
renewable sources, it would not be zero carbon.

While full electric aircraft would have the lowest emissions, technology readiness levels are such that beyond small
short-range aircraft, this option for commercial airliners remains decades away. This is why new technology
manufacturers including Heart Aerospace and Aura are proposing hybrid solutions that achieve substantially reduced
emissions. By introducing two small gas turbine engines to charge the batteries in flight, emissions would arise in the
later phases of flight beyond a short range. Both believe their respective hybrid products will enter service during the
current decade.

An alternative potential solution to the technology issues surrounding pure electric regional aircraft is hydrogen as an
energy source to generate electricity in fuel cells.

Non-carbon Emissions & Contrails

The prime focus of emissions in all industries relates to carbon, but other harmful gases are also produced including
from aviation. These are illustrated in Figure 2.17 and are usually not adequately accounted for in most emissions
calculations.

Figure 2.20: Emissions from Air Travel

Pollutants produced

CO2 Water vapour

Sulphate Particles
Nitrous gases Soot
Source: IPCC

In addition to nitrogen oxides, which have both a warming and a cooling effect, but a net warming influence, particles
including hydrocarbons, soot and sulphates are generated. Newer generation engines emit far fewer particles than
earlier models, but their effect remains substantial. When aircraft fly at cold high altitudes above 30,000 feet in humid
air that is supersaturated in water with respect to ice those solid particles trigger a cloud formation. The contrail clouds
that are generated usually dissipate over a short period but can last up to 24 hours. Even though these have a short life
span they do have a significant warming effect which is more potent at night when outgoing earth radiation is trapped
under the formed cloud cover.
If the effect of non-carbon emissions and contrails are converted to an equivalent of carbon dioxide effects, the total
impact increases substantially. Contrails form the largest part of this additional effect. However, these contrail effects
are absent from the ATR72 because its operating ceiling is 20,000 feet, an altitude at which contrails are not formed.
The Dash 8-400 is limited to 25,000 (see Fig. 2.14) feet where contrails are also generally not formed. Relative to other
commercial aircraft, this further enhances the environmental performance of turboprops.
32 | Turboprop Market Report

3 Market Review

While the following market review maintains the same structure as the previous aircraft turboprop report in 2020, this
version has been prepared in the context of the post COVID-19 situation, current geopolitical and economic events,
and the current important drive to improve if not eliminate the environmental impact of aviation. This necessitates a
different emphasis within certain sub-sections and also addresses the fact that it is not necessarily possible to draw
similar conclusions from the empirical data shown. It also includes a new introductory section 3.1, to explain the role of
turboprops within the global air transport ecosystem.

Furthermore, this section broadens its scope to include current generation turboprops to include the in-production ATR42
series. As there is no operator base for new technology aircraft this market review section only covers this segment
where relevant and introduces limited references to older generation 19-50 seat turboprops where applicable.

3.1 Deployment of Turboprops

In order to understand the position and demand for turboprops in the short-haul air transport ecosystem the optimal
role of this size and type of aircraft can be summarised as serving:

• Short sectors up to a stage length of up to 300nm where the flight time difference between operating a jet and
turboprop service is less than about 15 minutes. While some turboprops do operate longer sectors, the proportion of
turboprop services compared to jets reduces dramatically. In 2022 the average turboprop sector was under 200nm.

• Destinations where the airports cannot accommodate jet aircraft due to short runways, obstacle clearance, or hot
and high operating restrictions.

• According to ATR’s Turboprop Market Forecast 2022-2041, some 1,290 commercial airports out of 3,800 can only be
served by turboprops.

Figure 3.1: Commercial Airports served by Turboprops

+3,800
45% Airports relying exclusively
on regional aircraft
34% Airports relying exclusively
Commercial on turboprop
airports

Source: ATR

• Markets where passenger demand is such that the capacity provided by regional jets or larger narrowbody aircraft
cannot be justified. Typically, routes where the subject turboprops are ideally suited are those where demand is less
than about 100 Passengers per Day Each Way (PDEW).

• Markets with thin demand that could justify a larger aircraft if a single daily frequency or less provided a sufficient
service level, but where at least a double daily frequency better serves the demand. This could include markets with
a significant portion of business travellers who require a same day return service or markets where greater frequency
enables more connections at hub airports.

• Markets where yields render the operation of a similar capacity regional jet uneconomic. As shown in Figure 2.15, the
operating costs of an equivalent size regional jet are significantly greater that those of a turboprop.

• Routes that are deemed necessary as a public service that would not be economically viable without national or local
government support. In Europe these are referred to as Public Service Obligation (PSO) routes. There are some 170
such routes in Europe to remote destinations. One of the most extensive PSO networks is in Norway. Others include
many services to Greek islands and those off the coast of Scotland and inter-island services in the Canary Islands or
the Azores. In the US, such routes are covered by the Essential Air Services (EAS) programme.

• Similar, and in some cases even more extensive, programmes exist in developing countries including Indonesia
(PERINTIS) and India under the Regional Connectivity Scheme (RCS-UDAN) which now has the world’s most extensive
publicly subsidised network. (Fig. 3.2 shows the pre-COVID status in 2020. There are 419 approved routes in 2022 of
which a small proportion are operated by helicopter.)
 Turboprop Market Report | 33

Figure 3.2: Publicly Supported Regional Connectivity Scheme Routes in India 2020

Source: Maps of India

Figure 3.3: Aer Lingus Regional Network

• Some airlines also operate turboprop aircraft to

feed their respective hubs. For example, Aer Lingus
Regional operated by Emerald Airlines feeds its Dublin
transatlantic network with ATR72-600s from most UK
airports outside the London area as shown in Figure 3.3.

• Others including Iberia Regional feed Madrid from

smaller domestic airports, but also feed with regional
jets from further afield.

• However, feeding hubs is more commonly done with

regional jets in most of the world particularly where
the sector lengths from secondary or tertiary cities can
often exceed 500nm.

Source: Great Circle Mapper

 34 | Turboprop Market Report

3.2 Numbers in Service Update

The total number of ATR72s in active service of all variants is currently around 800 units. The latest -600 has been the
most successful with 492 in active operation at the end of 2022 considering its relatively short history since 2011. The
smaller ATR42 has a worldwide population of 226 active units. The breakdown between the various models is shown in
Figure 3.4.

In comparison, the status of the competing Dash 8-400 fleet is also shown in Figure 3.4 and this includes all variants of
that aircraft since it was launched in the late 1990s. For in service aircraft, the ATR72-500/600 now leads the Dash 8-400
by around 300 units and the ATR72-600 on its own now leads the entire Dash 8-400 fleet.

Figure 3.4: ATR42/72 & Dash 8-100/200/300/400 Population (Dec 2022)

Dash 8-400
Dash 8-300
Dash 8-200
Dash 8-100
ATR72-600
ATR72-500
ATR72-200
ATR42-600
ATR42-500
ATR42-300
0 100 200 300 400 500 600 700 800

In service On order Stored Source: Ascend by Cirium & ch-aviation

When compared to all aircraft types with a capacity of between 70 and 90 seats the ATR72 and Dash 8 populations,
including stored units, look respectable compared to similar regional jets. In the case of both ATR and Bombardier, the
turboprop fleet size of each exceeds comparable capacity regional jet populations as shown in Figure 3.5 except for the
E175, which has proved highly successful mainly in North America.

Needless to add, for the new technology aircraft types, none are yet in service and none are expected to be delivered
over the next few years.

Figure 3.5: ATR72-500/600 & Dash 8-400 Fleet Size v Similar Regional Jets (Dec 2019 & 2022)

CRJ900

CRJ700

E175

E170

Dash 8-400

ATR42-500/600

ATR72-500/600

0 100 200 300 400 500 600 700 800 900 1,000

Numer of aircraft
2022 2019 Source: Ascend by Cirium

3.3 Delivery Profile

The delivery profile of relevant turboprops is an important consideration as it enables the age of any proposed aircraft
acquisitions to be compared with the population of aircraft manufactured. In general, more recent vintages are
considered to be more attractive to the used market so that younger aircraft should facilitate easier future placement
opportunities and premium lease rates. However, in the used turboprop market there are also a number of operators
that are age agnostic. In such cases, they may prefer to compare aircraft available based on a combination of their
maintenance status and the cost of acquiring or leasing the aircraft.
 Turboprop Market Report | 35

As shown in Figure 3.6 the ATR72 delivery profile peaked in 2016 and has trended downwards thereafter. From 2016
this reflected both production capacity with increased ATR42-600 output as well as fewer ATR72s to correct a level
of overproduction to lessors of units that occurred in the two preceding years. This had already created a mildly soft
market for the type in subsequent years which ATR addressed by a significant production rate cut from over 70 units to
an average of 60 per year through to 2019. Thereafter, the onset of COVID-19 led to a delivery rate of only 10 aircraft in
2020. Meanwhile ATR42-600 production had increased steadily to 2019 before dropping to a single unit in 2020.

Figure 3.6 also depicts the delivery profile of the Dash 8-400, which shows that aircraft leading deliveries until 2011,
after which the ATR has outperformed the Dash 8 by more than 2:1. This reflects the greater importance of competitive
operating costs in the Asian market, which is now ATR’s largest market in comparison to the previously dominant North
American market where the Dash 8 has the biggest market share.

The onset of COVID-19 led to a dramatic fall in deliveries driven as much by an inability to finish the manufacturing
process and accept aircraft due to the inability to travel, as much as any short-term lack of demand for the additional or
replacement capacity.

ATR deliveries recovered in 2021, but to a much lower level than previous years partly due to subdued demand but also
a slow ability to restore production because of supply chain component shortages. Some 25 ATRs were delivered in 2022
and an increase to around 40+ is projected for 2023. In the case of De Havilland the final aircraft from the Downsview
facility were delivered in 2022 and a decision on any re-launch of production at a new facility in Calgary is not expected
imminently and may still be some time away.

None of the new technology aircraft are expected to be delivered before 2026 at the earliest.

Figure 3.6: ATR72-500/600 & Dash 8-400 Delivery Profile (1994-2022)

75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
94

95

96

97
98

99

00

01
02

03
04

05

06

07
08

09

10

11
12

13
14

15

16

17
18

19
20

21
22
20
20

20
20
20

20

20
20
20
20
20
20

20
19

19

20
19

19
19

20

20
20
19

20
20

20
20
20
20

ATR42-500 ATR42-600 ATR72-500 ATR72-600 Dash 8-400 Source: Ascend by Cirium & TrueNoord Insight

3.4 Firm Order Backlog

Current Generation Aircraft
The firm order book for the ATR turboprop family stood at 173 units at the close of 2022 as shown in Figure 3.7. This
comprises 139 ATR72-600s and 34 ATR42-600s. Compared to the data used in 2020’s Large Turboprop Report when
the backlog for ATR72s was 162 units this represents a reduction. Although, production has also slowed markedly since
2020 and the Dash 8-400 is now out of production, this does not necessarily signal a medium to long-term reduction in
demand for turboprops. The hiatus of the COVID pandemic and its after-effects combined with more recent short-term
uncertainty means that it would be premature to draw long-term conclusions from data relating to the last three years.
In addition, although absolute order volumes are still reduced, the diversity of carriers in the order backlog has grown
so that more customers appear with smaller volume backlogs. Any such growth is regarded as a positive future market
signal. In addition, some of the big order backlogs including Federal Express and IndiGo have reduced as the aircraft
continue to be delivered and enter service.
 36 | Turboprop Market Report

TrueNoord Fleet
2 Dash 8-400
 Turboprop Market Report | 37

As with any commercial aircraft programme, the role of forward order lessors is important. However, the value of such
forward orders is not the same as in the larger single-aisle market for several reasons. First, the absolute market size
and the number of operators in the turboprop market is much smaller than the narrowbody segment so that placement
opportunities for aircraft ordered without a specific lessee in place are more limited. Secondly, access to delivery slots
directly from the manufacturer is easier in the turboprop market as delivery lead times are shorter. Typically, such
order to delivery lead times are no longer than two years, unless any such requirement is above a single digit volume.
Consequently, the prevalence of lessor forward orders is less than for the larger aircraft market and indeed turboprop
manufacturers are less motivated to sell delivery positions to lessors as the smaller scale of the market means that the
risk of the OEM finding itself in competition with lessors to place aircraft with both new and existing airlines is greater.

Nevertheless, lessor forward orders do have a role in the market. Historically NAC as the largest turboprop lessor before
the pandemic had a substantial forward order book, which had already diminished to some 20 ATR72s in 2019 and
now has five positions remaining. AerCap has inherited the remaining slots from GECAS and Abelo has increased its
commitment to 20 equally divided between ATR42-600 and ATR72-600 aircraft.

Figure 3.7: Outstanding ATR Turboprop Orders (Dec 2022)

Silver Airways
Royal Air Maroc
Global Airlines
Maldivian
EasyFly
NAC
Air Tahiti
US Bangla
Toki Air
Precision Air
Cubana
Bahamas Air
Air Vanuatu
Air Caraibes
Avation
ALC
Cebgo
Firefly
Air Caraibes
ALC
Tarom
Afrijet
Braathens
Ai Madagascar
Tunis Air
Air Corsica
Garuda
PNG Air
Unannounced
MAS Wings
PNG Air
Aercap
Avianca
Abelo
IndiGo
Wings Air/Lion Air
Federal Express
0 2 4 6 8 10 12 14 16 18 20

ATR72-600 ATR42-600 Source: Ascend by Cirium, ATR

38 | Turboprop Market Report

Future Generation Aircraft

Of the subject aircraft considered in this report, all of the new technology types have garnered a level of interest that can
at this stage be measured by the signature of Letters Of Intent (LOI) shown in Figure 3.8. Therefore, these commitments
cannot be compared to the firm orders shown above for existing generation turboprops, which do not show options or
LOIs. Although some state that a portion of the LOIs are firm, all the new technology OEMs wish to convert the LOIs to
firm orders, but it is not clear what milestones would need to be reached for customers to be sufficiently confident to
place firm orders or when such conversions could take place.

As it stands there are approximately 1,000 commitments with varying degrees of firmness across each of the two hybrid
electric and H2 powered pathways. All of the latter are to be retrofitted to existing airframes from Cessna Caravans up
to ATR72 airframes although a portion of the ZeroAvia powertrain commitments are also envisaged on CRJ regional jets
in North America.

With respect to the intended operators for these commitments, there is insufficient data to generate an accurate
breakdown. However, the list does include major airlines ranging from Air New Zealand, DHL, Mesa, Afrijet to Connect
Airlines and Air Canada.

Figure 3.8: Future Technology Commitments (Dec 2022)

900
Electric Hybrid Hydrogen
800

700

600

500

400

300

200

100

0
Alice ERA ES30 ZeroAvia Universal
Hydrogen
Source: Eviation, Aura, Heart Aerospace, ZeroAvia, Universal Hydrogen, Ascend by Cirium

3.5 Future Turboprop Forecast

The provision of any forecast for the future demand and size of the turboprop market is outside the scope of this report
so that the following brief guidance is intended as an overview of third-party projections only.

Current Generation Aircraft

Both ATR and Embraer provide forecasts for the turboprop sector. De Havilland has paused the Dash 8-400 and has
also not published any recent market forecasts. Any future De Havilland forecast is a precursor to its decision on whether
to re-start production of the Dash 8-400 in Alberta.

Japan Aircraft Development Corporation (JADC) provides a detailed forecast analysis which includes a section on
turboprops as shown in Figure 3.9. Compared with the current fleet as measured by JADC of some 2,900 units of all sizes
between 15 and 100 seats, 2,751 new deliveries are forecast. As the incumbent turboprop fleet is aging JADC projects that
79% of the new deliveries will be to replace the existing fleet and 21% will be for growth. However, it is not clear to what
extent, if at all, any alternative propulsion aircraft are included in this view. As the JADC forecast projects a much higher
growth projection for larger jet aircraft of nearly 50%, this would suggest that alternative propulsion aircraft are either
not included or form only a minor part of the forecast.
 Turboprop Market Report | 39

Figure 3.9: JADC Turboprop Market Forecast to 2041

2,500
Total fleet:
End of 2021 2,897
End of 2041 3,476
2,000
New deliveries:
2022-2041 2,751 1,698

1,500

1,135

1,000

616
1,170
500 410 360 392
788
612 519 563
328 420 284 392

0 82 4 76
15-19 Seats 20-40 Seats 41-60 Seats 61-80 Seats 81-100 Seats

2021: Existing 2041: Retained 2041: New deliveries Source: JADC

By contrast, the ATR forecast projects global demand for 2,450 aircraft in the 50-70 seat category compared to some 1,420 in
the JADC view. Embraer projects demand for some 2,300 turboprops but does not specify what seating capacities are included.

Future Generation Aircraft

As yet there are no forecasts predicting the number of new technology hybrid electric or hydrogen powered aircraft to be
delivered for commercial service by a certain date. There are some forecasts that attempt to predict the monetary value of
these sectors by 2030 and beyond. For example, the Monetary Research Community (MRC) projects the market for electric
powered aircraft to reach US$26.4 billion by 2030 with a Compound Annual Growth Rate (CAGR) of some 14.5%. Another,
Allied Market Research, projects the hydrogen aircraft market to be worth US$23.7 billion by 2030 with CAGR of 20.5%. Others
project varying amounts.

Any addressable market for future technology aircraft will be driven by a combination of older and current generation
aircraft that could be replaced and an amount of aircraft for growth. According to Ascend by Cirium, there are currently 4,422
commercial turboprop airliners in service and 1,241 in storage. Outside the aircraft within the scope of the less than 2,000
aircraft in this report, the majority of the remaining 2,500 are now ageing aircraft in excess of 30 years old. If these aircraft
are not replaced then the services that they currently operate will either discontinue or would need to be operated by other,
predominantly larger, aircraft types.

The majority of the above referenced ageing 2,500 aircraft in the 19-40 seat category could arguably be regarded as a
conservative baseline replacement demand level for the current future technology aircraft described in section 2. This assumes
that cleaner or emissions free propulsion delivers no growth in market demand. If the new technology delivers lower or
emissions-free propulsion at a cost which is similar to or less than using conventional aircraft it is likely that there would also
be significant growth in this smaller capacity segment.

3.6 Turboprop Operator Base

The absolute number of operators of any particular type is a vital determinant of its suitability as a leasing product.
This is a prime driver of liquidity by showing the number of operators that could absorb additional incremental aircraft.
On its own the number of operators is not a sufficient indicator of liquidity as a strong operator base can be materially
weakened if there is an excess concentration of aircraft with a small number of operators. This can reduce liquidity and
poses a risk if any of the largest carriers go bankrupt, or unexpectedly phase out the type thereby creating a large pool
of available aircraft. This means that the level of concentration is an equally important measure.

The number of operators of the subject 50-90 seat current generation turboprops is shown in Figure 3.10.
40 | Turboprop Market Report

Figure 3.10: Number of Turboprop Operators in Dec 2022

Dash 8-400

ATR42-500/600

ATR42-500

ATR42-600

ATR72-500/600

ATR72-500

ATR72-600

0 10 20 30 40 50 60 70 80 90

Source: Ascend by Cirium & ch-aviation

3.6.1 ATR 72 Operators

Currently the number of ATR72-500/600 operators is approaching 150 with 18 carriers that continue to fly a mixed fleet
of both -500 and -600 variants. This is the largest operator base of any regional aircraft type and has grown further
since December 2019. Since then an additional 15 airlines have newly adopted or transitioned to the ATR72-600. (There
are currently 83 ATR72-600 operators compared to 68 in December 2019 and 56 in December 2017.) The number with
a mixed fleet has reduced slightly from 20 in 2019 to 18 in 2022 but some have transitioned to an all ATR72-600 fleet and
have therefore dropped out of this category and others have acquired the new model to either begin the replacement
process or complement their -500s already in service.

The overall breadth of this operator base should be considered positive for future liquidity and residual values of the
type. Within the total fleet there are only four carriers with fleets of more than 30 aircraft as shown in Figure 3.11. The
largest operator is Lion Air’s regional arm, Wings Air with 70 ATR72-500/600 and its sister airline in Malaysia (Batik
formerly Malindo), with a further 9, represents 9% of the global fleet, followed by Azul with a fleet of 40 ATR72-600.
The next largest operator and the fastest growing fleet is IndiGo. Air New Zealand subsidiary Mount Cook Airlines has
a stable fleet of 31 units. As such, while there is some level of concentration at Wings and Malindo, there are no other
carriers that account for concentration levels exceeding 4% of the installed active fleet base.

Figure 3.11: Largest ATR72 Operators (Dec 2019 & 2022)

Wings Air & Batik

79 Azul

40 IndiGo
76 38
33 Mount Cook
22 31
31 Binter
27
ATR72-500/600 25 22 Cebgo/Cebu
2022 2019 17
Fleet 16 18 Alliance
15 15
15 14 UT Air
15 14 Uni Air
474 14 Bangkok Airways
11
Emerald Airlines
593 Garuda

Other
Source: Ascend by Cirium & ch-aviation
 Turboprop Market Report | 41

3.6.2 ATR42 Operators

There are currently 63 ATR42-500/600 operators including those in special mission roles for coast guard, surveillance
and corporate applications such as transport to oil and gas installations or remote mines (Fig. 3.12).

Of these, 38 exclusively operate the ATR42-500, 19 only use the ATR42-600, and the remaining use a mixed fleet of both
types. EasyFly in Columbia with 14 aircraft is the largest operator with 8% of the global fleet. No other operator accounts
for more than 5% of the incumbent fleet and 60% of the total is with smaller carriers outside the ten largest. This means
that although the ATR42 is more concentrated with the largest operators than its sibling, the operators’ base can still be
considered reasonably broad.

Figure 3.12: Largest ATR42-500/500 Operators (2022)

EasyFly

Japan Air Commuter

14
9
Silver Airways
8
Satena
7

Loganair
2022 ATR42-500/600 7
Fleet
6
Aeromar
6
Canadian North
6
5 TAROM
103
Air Antilles

Other Source: Ascend by Cirium & ch-aviation

3.6.3 Dash 8-400 Operators

Currently the number of Dash 8 operators comprises of 60 carriers as shown in Figure 3.10. Despite the bankruptcy of
Flybe and the exit of the type from other fleets including Eurowings, this number of carriers has remained stable since
2019 (58). By the time the planned disposal of the Air Baltic and LOT fleets are complete this number will remain the
same as in 2019. This is still a reasonably substantial base despite the negative market sentiment surrounding the type.

While there is a substantial Dash 8 operator base, there are also a number of large carriers within the customer base.
WestJet Encore is the largest operator with 47 aircraft, which accounts for 8% of the worldwide fleet. When Jazz, Horizon,
and Sunstate (operated for Qantas) are added, 150 aircraft of the total fleet of around 575 aircraft are concentrated in
4 carriers. As shown in Figure 3.13, this does represent a certain level of concentration among key operators although
the bankruptcy of Flybe in particular has reduced this concentration level compared to 2019.

Figure 3.13: Largest Dash 8-400 Operators (Dec 2019 & 2022)
Westjet

47 Jazz

39
47
Horizon
44 31

33 Sunstate
31
2022 2019 Dash 8-400
Fleet 31
29
Porter
188 29
292 17 20 30
Other 54 32 Ethiopian
25
28
Eurowings 24 Spicejet
12 12
ANA Wings
Flybe PAL Express
Widerøe Source: Ascend by Cirium & ch-aviation
 42 | Turboprop Market Report

However, while the Dash 8 fleet does exhibit a level of concentration, the fleets of similar sized regional jets are more
concentrated within a small number of airlines. For example, the CRJ900 fleet is heavily dominated by Endeavour (for
Delta), PSA and Mesa (both for American Airlines). Any such concentration can pose a risk to residual values but can also
underpin values as is the case with the E175 fleet, which is heavily concentrated at Republic and SkyWest and likely to
remain in service at both in the long-term.

3.6.4 Relative Concentration

For the ATR72 such levels of concentration are no different to the large fleets of narrow bodies operated by some of the
large US legacy airlines and LCCs such as Southwest or Ryanair.

Moreover, the fleets of similar sized regional jets, the CRJ900 and E175 are substantially more concentrated within a
small number of airlines with the former heavily dominated by Endeavour (for Delta), PSA and Mesa (both for American
Airlines). Similarly, the E175 fleet is heavily concentrated at Republic and SkyWest. Each of the CRJ900 and E175 have
narrower operator bases of some 20 carriers each.

Furthermore, the concentration levels of the ATR72 compare favourably with those of the Dash 8-400 where 26% of the
total fleet is with only four airlines. While the ATR is less concentrated, the Dash 8-400 still has a broad operator base
relative to similar capacity regional jets.

3.7 Geographical Dispersion

3.7.1 Historical Perspective
From a lessor perspective, a wide geographical distribution is desirable since this assists market liquidity and placement
opportunities in the secondary market. Often if a type falls out of favour in one region, such as North America for
turboprops in the early part of the century, (as can be seen in Figure 3.14), this can affect several operators in the same
region so that an ability to place used fleets in other regions is important.

While Figure 3.14 shows large turboprops upwards of 50 seats to indicate the regional evolution since 2000 when
the current 70+ seaters were less prevalent, there has always been geographical dispersion. However, while Europe
accounted for almost half the entire market in 2000, Asia Pacific has become the largest market since 2012. The
European market share has declined and all others have grown moderately or remained stable. During the period the
US turboprop market also declined but was compensated by substantial growth in Canada. Today’s large turboprop
market can be described as geographically well diversified.

Figure 3.14: Global Turboprop Fleet Trend By Region (2000-2022)

2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Africa Asia Pacific Europe Latin America Middle East North America Source: Ascend by Cirium

3.7.2 ATR42/72 & Dash 8-400 Geographical Dispersion

The world’s fleet of ATR aircraft remains widely dispersed with the Asia Pacific region and Europe accounting for the
largest portion of the entire fleet (Figure 3.15). This makes the APAC region the world’s largest current generation
turboprop market with almost 500 units. The ATR is the dominant turboprop in all markets except North America where
the Dash 8-400 is market leader. In the smaller African market, the Dash 8 is also slightly ahead.
 Turboprop Market Report | 43

At present, the geography of the newer ATR72-600 fleet is more concentrated in the APAC region. This region now
accounts for 47% of in ATR72-600s, while its second largest market in Europe accounts for 29%. North America is almost
absent from current generation ATRs with only 18 of both -600 variants. However, Federal Express has placed a large
order for freighters of which ten were delivered by the year end 2022.

By contrast the Dash 8-400 has performed strongly in North America primarily in its Canadian home market. While
according to Figure 3.15 the type appears to still have a reasonable presence in Europe, much of this fleet is either
stored by operators looking to dispose of their fleets, or by lessors that have returned aircraft, or repossessions following
bankruptcies. The only growth market is Africa where its performance characteristics make the Dash 8 more suitable to
that market.

With respect to the smaller ATR42-500/600 fleet, Europe, Latin America and Asia account for some 40-50 aircraft in
each (82% of the global fleet) with the smaller remainder divided between North America and Africa.

Figure 3.15: Geographical Distribution of the ATR42/72 & Dash 8-400 Fleet (Dec 2022)

North America

Africa

Middle East

LATAM

APAC

Europe

0 25 50 75 100 125 150 175 200 225 250 275 300

Dash 8-400 ATR72-600 ATR72-500 ATR42-600 ATR42-500

Source: Ascend by Cirium

3.8 Operator Segmentation

The ATR72 operator base comprises some strongly regarded carriers including Air New Zealand subsidiary Mount Cook,
IndiGo and Binter Canarias, but there is a larger proportion of less well known independent regional airlines in the fleet
or large carriers in developing countries. Some of these are financially less strong and operate in less stable jurisdictions.

By contrast, despite the loss of well-known names to the programme, particularly in Europe, the Dash 8 operator
base still comprises an extensive list of better known airlines as many are either owned by major national carriers in
developed jurisdictions, or operate on their behalf. For example, this includes strong home market names like Jazz which
flies for Air Canada or WestJet, Sunstate which operates as Qantas Link in Australia, and ANA in Japan. Many of these are
considered to be strong credits.

Part of the explanation for this divergence in their respective types of operator base is that the ATR72 is a lower cost
regional aircraft optimised for short regional flights while the Dash 8 offers benefits as a feeder aircraft to larger
carriers. For example, the Dash 8 is faster, if needed, thereby offering speeds closer to those of jets and equally
importantly in some markets, passengers board the Dash 8 from the front (rear boarding in an ATR), which means
airport air bridges can be attached. The latter is important in North America.

An additional contributing factor is a long-term strategy by ATR with respect to the secondary market, nurturing small
operators deploying used aircraft as they may in future order new aircraft.
44 | Turboprop Market Report

4 Large Turboprop Aircraft Owned by

Lessors
4.1 Comparative Lessor Penetration
The number of aircraft as a proportion of the total fleet is a strong indicator of the maturity of any type among the
leasing community. A strong level of lessor penetration suggests that the aircraft is perceived as a strong asset class
with good liquidity characteristics and high value retention. It is therefore not surprising to see the most popular narrow
body aircraft with a penetration approaching 50% of all aircraft as shown in Figure 4.1.

Lessor penetration of the active ATR72 fleet at levels exceeding 50% is close to those of narrow bodies and suggests
the type is more mature from a leasing perspective than any other regional aircraft type. The proportion of leased
ATR72-600s is even greater at around 57% and lower for the ATR72-500 (38%). By comparison the proportion of leased
Dash-8-400s stands at 31%, which is more similar to some of the regional jets. As less widespread types with relatively
small fleets, the lessor penetration level for both variants of the ATR42 is also around the 30% level.

However, the number of active lessors in the large turboprop market is a fraction of the single aisle types (see Figure
4.2) and less than for some regional jets. Although the scale of the large turboprop leasing market is much smaller than
larger aircraft, the smaller number of active lessors with scale is a positive factor that underpins their business models
since this reduces the number of lessors that compete to fund aircraft for those operators seeking this type of finance.

Figure 4.1: Operating Lease Penetration Comparison by Aircraft Type (Dec 2022)

Dash 8-400

ATR42-500/600

ATR42-600

ATR42-500

ATR72-500/600

ATR72-600

ATR72-500

0% 10% 20% 30% 40% 50% 60% 70%

Source: Ascend by Cirium

4.2 Turboprop Leased Fleet Review

A breakdown of the main lessors of ATR72s is shown in Figure 4.2. This shows that despite some recent contraction, NAC
remains the largest ATR lessor with 94 ATR72-600s and a further 21 ATR72-500s. (NAC is also the dominant Q400 lessor
with 71 of the type). While DAE is the second largest lessor of ATR72-600s approaching a fleet of 70 aircraft, it has no
other turboprops so that Falko, after its merger with Chorus, is now the second largest turboprop lessor with Aergo,
Abelo and TrueNoord in fourth, fifth and sixth positions respectively. Beyond this and with only Avation and ACIA Aero
owning more than 20 turboprops, the remaining lessors comprise those with small portfolios.
 Turboprop Market Report | 45

Figure 4.2: Large Turboprop Lessors Who’s Who (Dec 2022)

Other
Airtrails
Montrose
Investec
Avico
Castlelake
Phoenix Aircraft Leasing
MDT
Airborne Capital
Rockton
Doric
Erik Thun AB
HEH
Avmax
CIB Leasing
Sky Leasing
Azorra
Boeing Capital
Regional 1
GOAL
Aercap
ACIA Aero
Avation PLC
TrueNoord
Abelo
Aergo Capital
DAE Capital
Falko
Nordic Aviation Capital

0 10 20 30 40 50 60 70 80 90 100

Dash 8-400 ATR72-600 ATR72-500 ATR42-600 ATR42-500

Source: Ascend by Cirium & IBA

A significant driver of the ability to place an aircraft at good rentals at any particular point is the competitive position at
that time. From a lessor’s perspective, the case for leasing large turboprops improves if its lease returns are staggered
over time and are scheduled to avoid periods when large numbers of similar aircraft also become available on the
market, as this would minimise competition with other available aircraft.

Of the 337 leased ATR72-600s and 120 leased ATR72-500s aircraft recorded, the return dates are known for 209 -600s
and 55 -500s (see Fig 4.3). This represents a more extensive set of data points compared to the previous report in 2020
but is still far from complete. For the ATR72-500, 8 are due to be returned from Wings Air this year and 5 from Nordic
Regional. Based on the available lease return data, 2025 is the only year during which some 10% of leased ATR72-600s
may become off-lease from Azul (6), Alliance Air (6) and Citilink Indonesia (6). Some of these leases may be extended,
but 2025 could still be a year when an above average number of leased aircraft need to be placed.

With respect to the smaller ATR42 fleet, the -500 is an ageing aircraft type so that scheduled lease returns for most
of the leased fleet over the next three years is to be expected. For example, Air Antilles has a number of leases due to
expire over the coming years. By contrast the newer -600 variant has a much more evenly spread return profile and is
the type where most lease end dates have been reported and are published.

For the Dash 8-400 only 32% of lease return dates are publicly available. Of those which are known, some two-thirds are
due to be returned by 2026. The 20 due to be returned in this period includes most aircraft remaining in Europe, as well
as significant numbers of Jazz and Ethiopian aircraft.
 46 | Turboprop Market Report

Figure 4.3: Known ATR42-500, ATR42-600, ATR72-500, ATR72-600

and DHC-8-400 Lease Returns (Dec 2022)
40

35

30
Number of Aircraft

25

20

15

10

0
2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

ATR42-500 (52%) ATR42-600 (84%) ATR72-500 (46%) ATR72-600(62%) Dash 8-400 (32%)
Source: Ascend by Cirium & IBA

TrueNoord Fleet
4 ATR 72-600
 Turboprop Market Report | 47

5 Market Availability and Demand

5.1 Demand and Supply Drivers
From a historical perspective, as older generation ATR42, ATR72 and early Dash 8-400s continue to age, it is normal for
top tier carriers to seek to roll over their fleets into newer generation equipment. This would have the effect of increasing
the supply of used aircraft unless a similar number of aircraft were retired at the same time. This could be measured
by either the number of aircraft offered for sale or lease, or the number of aircraft in storage in the short-term at any
point in time. The latter has been used as an indicator for availability over many years as there is no complete way of
measuring aircraft offered to the market.

However, the COVID-19 pandemic caused a massive drop in flights for the majority of all aircraft including turboprops
as shown in Figure 5.1 for ATRs and Dash 8-400 (A320s are also shown as a wider industry comparison). On the demand
side during the recovery period, the ATRs have returned to service as quickly and at certain times faster than the A320,
but the Dash 8 has underperformed and remained at only two-thirds of pre-COVID levels at the end of 2022. The latter
was driven by a combination of the bankruptcy of its largest operator Flybe and the decision by several other airlines not
to reintroduce the type.

Figure 5.1: ATR42/72-500/600, Dash 8-400 and A320 Flight Cycle Evolution (Jan 2020-Dec 2022)
100%

90%

80%

70%

60%

50%

40%

30%

20%

10%

0%
20

20

20

20

20

21

21

21

21

21

22

22

22

22

22

23
02

02
02

20

20

20

20

20

20

20

20

20

20

20
20

20

20

20

20

l2

l2
l2

ar

ay

ar

ay

n
Ju
n

ar

ay

Ju
No
Ju

Ja

Se

No
Ja

Ja
No

Se
Ja

Se

M
M

M
M

ATR Dash 8-400 A320 Source: IBA Insight

The initial plunge in demand led to a proportionally corresponding jump in stored turboprops is shown in Figure 5.2.
This spike in 2020 and more gradual recovery thereafter renders it difficult to use aircraft in storage as a proxy for
availability until the demand environment has normalised.

5.2 Large Turboprop Availability – Aircraft in Storage

There is no complete inventory of aircraft available for sale or lease at any point in time, which is why stored aircraft
data has often been used as a proxy. Apart from the above pandemic induced issues with this measure, the weakness
of this proxy at any time is that it includes aircraft that are in transition between lessees, or sellers and buyers, as well as
those that may be temporarily stored or parked for a variety of reasons. (The pandemic and subsequent recovery also
introduced much longer lead times for maintenance capacity and parts so that this has caused many aircraft to remain
unnecessarily classified as stored.) The trends for future lease returns and likely disposals in the leased fleet analysis
above and fleet transition data are also indicative of the future market. In addition, the analysis of the real availability
levels discussed below, which removes some aircraft that are known to be committed to other operators or
in maintenance, is also important.

In the short-term ongoing recovery period, the number of aircraft in storage is trending downwards towards 20%
(Figure 5.2) of the operating fleet (52 aircraft) for all ATR42s and 236 for all ATR72 variants including older -200 models.
This compares with 30% (157 aircraft) for the Dash 8. While any large inventory in the number of aircraft stored is
normally considered discouraging, the pandemic induced situation means that further analysis and segmentation is
required as described below.
 48 | Turboprop Market Report

The storage commentary below relates to current in-production ATR-42/72 models and the Dash 8-400.

ATR42-600 Stored Aircraft

In December 2022 there were 4 ATR42-600 in storage, which represents less than 6.5% of the total fleet. This level of
stored aircraft is much closer to the historical proportion of stored aircraft before the pandemic and can be seen as
broadly positive. In the meantime, most of these are now believed to have returned to service or transitioned. This
compares to 32 stored ATR42-500s.

ATR72-600 Stored Aircraft

Of the stored aircraft, 110 are ATR72-600s, which represents a large increase compared to 2019. However, many of these
aircraft have been in storage since the early part of the pandemic and many are either in poor condition or require
significant investment to make them airworthy. Some, including six that last operated at NAM Air in Indonesia, have been
stored since before the pandemic and would now require uneconomic amounts of maintenance expenditure. Others
including 10 at Iran Air and five at Windrose are also stored and cannot be placed elsewhere, and a further 10 former
Avianca aircraft have been sold to an investor for onward placement. Several other major operators in Asia including
Wings Air/Batik Air, Uni Air, and Bangkok Airways have some 15 aircraft between them still temporarily stored and this
more than likely reflects delayed maintenance inputs. This means that the actual amount of available airworthy aircraft
is a fraction of the total stored number. Only a small number are publicly advertised for sale and a substantial number
of those owned by lessors are understood to be committed for delivery during the first quarter of 2023.

Dash 8-400 Stored Aircraft

By the end of 2022 the recorded number of stored aircraft had increased to 141 from 37. Of these 58 are the more
desirable current (post 2009) Next Generation (NG) models. Ten of these were classified as stored in the SpiceJet fleet
as at Dec 2022 and most are likely to return to service shortly. A few more classed as stored are owned by Ethiopian and
a single Widerøe example was also temporarily stored. Four NG models that were previously at each of Air Baltic, LOT
and the former Flybe have been placed. However, despite their young age many of these have been parked for some
time and will therefore require investment, which means that at current relatively depressed rental levels this may prove
uneconomic. The majority of parked aircraft are older pre-2010 examples. Furthermore, some of the Dash 8-400NG
aircraft that are classified as parked are not stored because of any lack of demand, but rather because their engines
require shop visits. Engine MRO capacity and therefore availability of slots for PW150A engines is currently constrained.

Figure 5.2: Numbers of Large Turboprop Aircraft in Storage (Dec 2022)

ATR42 Storage
140 60%

120 50%
100
Number of Aircraft

40%
80
30%
60
20%
40

20 10%

0 0%
12

14

16

18

20
88

90

92

94

96

98

00

06

08

10

22
86

02

04

20

20

20
20
20

20
19

20
19

19
19

19

20
19
19

20

20
20
20

ATR72 Storage
700 70%

600 60%

500
Number of Aircraft

50%

400 40%

300 30%

200 20%

100 10%

0 0%
90

92

94

96

98

00

02

04

06

08

10

12

14

16

18

20

22
20

20

20
20
20

20
19

20
19

19

20
19
19

20

20
20
20

Stored Stored Fleet Share Source: Ascend by Cirium

 Turboprop Market Report | 49

Dash 8-400 Storage

350 70%

300 60%

250
Number of Aircraft

50%

200 40%

150 30%

100 20%

50 10%

0 0%
98

00

02

04

14

16
06

12

18

22
08

10

20
20

20

20
20
20

20
20
19

20

20

20
20
20

Stored Stored Fleet Share Source: Ascend by Cirium

5.3 Placement of Used Aircraft

Since the beginning of 2019 and as shown in Figure 5.3, existing owners have demonstrated some success in developing
new markets for used turboprops, with over 250 used aircraft transitions to new or existing operators completed since
early 2019 either through aircraft sales or new leases. Of these all but 29 placements related to ATRs. This represents
5% of the Dash-8 fleet and 20% of all -500 and -600 ATR aircraft. This shows a reasonably encouraging level of market
liquidity that is slightly greater than all other regional aircraft types. Furthermore, these placements were made with a
variety of operators in all geographical regions with no dominance of any single or small number of carriers.

Of the 47 ATR42 placements, these have been diverse over the period with Loganair and Canadian North standing out as
each has acquired six used -500 examples.

In the case of its larger sibling, 95 and 82 ATR72-600 and -500 respectively have transitioned between 2019 and 2022.
The biggest new operator in the period has been Emerald Airlines with 14 used aircraft leased in 2021 and 2022. These
ATR72-600s, which all operate for Aer Lingus Regional include four that were previously Stobart Air units. Olympic
leased nine -600s in 2021 and 2022. Air Cairo, which took delivery of five ATR72-600s in 2021-22 has committed to an
additional five in 2023 from NAC, and Caribbean Airlines a further three from the same lessor.

Of the Dash 8 transactions a number of former Flybe aircraft have been placed with Conair as part of a conversion
programme for forest fire fighting applications for which the performance of the aircraft is well suited, and more are
understood to follow during 2023 and beyond.

Figure 5.3: Turboprop Secondary Market Transitions (2019-2022)

Dash 8-400

ATR72-600

ATR72-500

ATR42-600

ATR42-500

0 10 20 30 40 50 60

2019 2020 2021 2022 Source: Ascend by Cirium & Airfinance Journal
 50 | Turboprop Market Report

5.4 Risk factors

While both existing lessors and other owners have had considerable success in placing used turboprops (especially
ATR72-600s) with other carriers against the backdrop of COVID-19, significant risk factors, which may affect demand,
remain. At a macro level these include:

• Any economic deterioration globally or within certain key regions such as Southeast Asia (ATR’s biggest market)
could have a substantial negative impact on the demand for used aircraft.

• If the strong post pandemic recovery of 2022 continues, the trend towards up-sizing capacity to larger aircraft could
resume and slow the demand for sub-90 seat aircraft.

• Any technological step-change particularly with reference to propulsion systems could impact the attractiveness of
used turboprops. While hybrid electric and hydrogen powered aircraft are likely to become a reality in future, there
is a wide industry consensus that such technology will not become widely available for 70+ seat aircraft within the
next decade. It is possible that this technology could threaten the up to 50 seat segment a few years earlier.

At a micro level, it only requires one or two major carriers with substantial fleets to decide to dispose of their fleets to
have a substantial market impact. As the ATR fleet is less concentrated in the hands of a few large operators than the
Dash 8 or other regional aircraft types, this risk is smaller for the type. However, any significant disposal programme
could dump significant fleets on the market in a short period, which would increase supply and thereby lower values
and lease rates.

TrueNoord Fleet
3 ATR 72-600
 Turboprop Market Report | 51

6 TrueNoord CMV and FV Assessment

6.1 General Trends
For all commercial aircraft types including turboprops, the COVID-19 pandemic initiated a period of volatility in both
aircraft values and lease rates. In the relatively small turboprop market compared to larger aircraft types much of this
was driven by sentiment rather than a sufficient pool of data points. This market sentiment led to dramatic reductions in
both appraised market lease rates and values in the second half of 2020 when commercial flights were still below 50%
of pre-pandemic levels and the recorded number of inactive parked aircraft was at its peak. From late 2020 when some
aircraft were re-activated and throughout 2021, some turboprops were leased at substantially below pre-pandemic
rentals, but almost no trades of used turboprops occurred from which market values could be derived as sellers were
unwilling to accept significant book value losses. This means that market values at the time were more theory than reality.

From about the second quarter of 2022 turboprop lease rates and Current Market Values (CMV) started to recover.
At that time, it had become clear that the inventory of parked aircraft fell into two categories: those that were airworthy
and could be re-activated with relatively little maintenance expenditure and those that had either been poorly stored or
where the passage of time meant that considerable investment would be needed to return them to service. In combination
with reduced production of new aircraft by ATR, De Havilland’s halt in production and a shortage of MRO capacity, this led
to a shortage of airworthy turboprops from the second half of 2022. In turn, this lack of supply caused a recovery in both
lease rates and CMVs, which has been reflected by appraisers increasing their values although these have not yet fully
returned to early 2020 levels. This has ensured greater market liquidity as evidenced in Figure 5.3.

New Values
During the pandemic years, values of newly produced aircraft from both ATR and De Havilland destined directly for airlines
remained less volatile than those of used examples. In this period De Havilland delivered the last Dash 8-400 before closing
its Downsview final assembly line. According to the average CMVs of appraisers (Fig 6.1 (iii)) these last of line units may have
been discounted and are likely to reflect pricing that was applicable to large orders placed by Ethiopian in particular.

With respect to new ATRs there had already been some softness in new values before the pandemic. This had primarily
been driven by lessors adopting a strategy of securing forward positions similar to large aircraft lessors. Production rates
were increased to deliver these aircraft, but as the turboprop market is much smaller than the narrow body market, this led
to some over-production. A few lessors, including some that previously had no turboprop exposure, which had purchased
ATRs to both diversify and reduce the average age of their fleets then began to discount lease rates significantly in order
to place their inventory. The pandemic served to prolong this until ATR dramatically reduced production rates to 10 units in
2021. By 2022 all remaining white tail aircraft held either by ATR or by lessors had been placed so that new values stabilised
and recovered later in the year. (Fig 6.1 (i) & (ii))

Since the start of a higher inflationary environment in March 2022, production costs have risen and the previous industry
standard escalation rates have also dramatically increased. While escalation applies to all aircraft manufacturers in similar
ways it remains premature to determine whether these higher costs can be passed on to customers in higher acquisition
prices. It would appear that appraisers have to some degree accounted for this in their base values, but so far not in CMVs.

Used Values
Both in the years preceding the pandemic and during the period thereof, used values have taken a different path for the
ATRs and Dash 8s.

In the few years before the pandemic the demand for used ATRs was already soft so that appraised CMVs for 3-10 year old
aircraft had become impaired (Fig. 6.1). This trend continued and accelerated with the onset of COVID-19 especially for the
larger ATR72-600. From the middle of 2021 market demand and the lack of airworthy used ATR72-600s began to emerge
so that by 2022 lease rates were recovering, which in turn led to appraisers increasing their CMVs. This trend seems set to
continue in 2023 albeit possibly at a slower rate. It is also possible that if escalation leads to higher new aircraft prices that
the cost of re-activating many of the remaining stored aircraft becomes more attractive than a year ago.

The smaller ATR42 market, which did not experience the same drop in appraised values is now also showing early recovery
indicators. However, it should be noted that the market for used ATR42s is small so that appraisers rely on fewer data
points than for other regional aircraft types.

In the later life ATR72-500 segment, there had been value stability in the pre-pandemic years as the cargo conversion
market had absorbed a greater proportion of older aircraft, but during the pandemic years, CMVs slid similarly and in many
cases faster than -600 variants. By late 2022 values and lease rates had stabilised but not yet shown many recovery signals.

Since fewer Dash 8-400s than ATRs have been sold both to end user airlines and lessors, lower production levels restricted
supply in the pre-pandemic years and thus ensured that used values held relatively strongly. However, the start of the
pandemic became the catalyst for not only the demise of the largest operator Flybe, but also a decision process that
led several other carriers to decide that the Dash 8-400 would not return to service at many other European operators.
This meant excess supply and markedly reduced lease rates and values (Fig 6.1 (iii)). Appraisers believe these have now
stabilised and begun to recover albeit at a slower rate than the ATRs.
 52 | Turboprop Market Report

Figure 6.1: Turboprop CMVs Over Time (Jan 2023)

ATR42-600 (i)
18
16
14
12
10
8
6
4
2
11

12

13

14

15

16

17

18

19

20

21

22

23
20

20

20
20
20

20

20
20
20
20

20

20
20
ATR72-600 (ii)
22
20
18
16
14
12
10
8
6
4
11

12

13

14

16

17

18

19

20

21

22

23
1
20

20

20
20
20

20

20
20
02
20

20

20
20

Dash 8-400 (iii)

24
22
20
18
16
14
12
10
8
6
4
98

00

02

04

06

08

10

12

14

16

18

20

22
20

20

20
20
20

20
20
19

20

20

20
20
20

0 year 3 year 5 year 10 year

Source: TrueNoord analysis of average CMVs from Avitas, mba & Ascend by Cirium

6.2 New Value Trends

While new appraised base values for an ATR42-600 are in the region of US$17 million in early 2023 and US$22 million
for ATR72-600s (with new CMVs some US$1million lower), there is some limited divergence for new values among the
appraisal community as shown in Figure 6.2. The appraisers indicated show a range of US$15.9million to US$17.1million
for a new ATR42-600 and diversity of views on the ATR72-600 of US$20 to 22.2million.

An average gap remains with respect to longer term future values for both ATR variants but this does gradually
narrow in absolute terms over time. Ascend by Cirium, which starts at marginally the highest new value for both types,
depreciates to its lowest value by 2030. By 2038 all appraisers have depreciated their future base values to a range
that diverges by about US$1million. Similar to the previous Large Turboprop Report (2020), the average residual
value after 10 years is close to 50% of the new value. This compares similarly to the best performing regional jets and
favourably to the less popular types. Furthermore, the future value performance over time is comparable to mainstream
single-aisle aircraft.

As the Dash 8-400 is currently out of production, no new values are shown. The previously mentioned reduced levels
of production and the restricted supply of airworthy used examples have set a positive short-term outlook. Base values
of the newest Dash 8-400s (2021 year of manufacture) are around US$19.5million with CMVs of around US$18million.
 Turboprop Market Report | 53

Figure 6.2: Appraised Base Value Profile New Turboprops in US$ millions (Jan 2023)
2023 ATR42-600
18
16
14
12
10
8
6
4
23

24

25

26

27

28

29

30

31

32

33

34

35

36

38
37
20
20

20

20
20

20
20

20

20
20

20

20
20
20

20
20
ATR42-600 Ascend by Cirium ATR42-600 Avitas ATR42-600 mba

2023 ATR72-600
24
22
20
18
16
14
12
10
8
6
23

24

25

26

27

28

29

30

31

32

33

34

35

36

38
37
20
20

20

20
20

20
20

20

20
20

20

20
20
20

20
20

ATR72-600 Ascend by Cirium ATR72-600 Avitas ATR72-600 IBA ATR72-600 mba

Source: Ascend by Cirium, Avitas, IBA & mba

6.3 Used Turboprop Values

While most appraisers and market participants concur that the long-term value retention prospects remain positive and
should continue to follow a traditional depreciation profile, the short-term remains soft for both ATRs although much less
so than even a year ago.

The smaller ATR42-600 market has seen very few transactions and therefore generated few data points over the last
two years and is likely to remain a niche product in certain markets. In future this will include the new STOL variant. Once
acquired, such niche market aircraft tend to stay with the same operators for much of their intended economic lives and
are therefore less likely to be traded. Unless an operator of the type ceases operations it is unlikely that a fleet of aircraft
big enough to affect CMVs or future values would occur. Potentially the greater risk to longer term future values of used
ATR42-600s is their replacement by new technology aircraft. Given that this sub-50 seat aircraft category is likely to be
replaced by new technology aircraft earlier than larger turboprops or existing jet aircraft, these aircraft could be more
susceptible to obsolescence risk than others. This means that future values should be relatively stable in the medium-term
but could have greater downside risk in the long-term.

For the ATR72-600 the medium to long-term future value prospects remain reasonably strong. Over the medium term no
other aircraft in the 70 seat category can match its operating economics including fuel-burn and associated emissions and
no new technology aircraft of its capacity is likely to be available over the coming years. The PW127XT engine provides
further incremental improvement and can be fitted on existing used aircraft. The aircraft also lends itself well to hydrogen
propulsion retrofit programmes as proposed by both Universal Hydrogen and ZeroAvia so that there is no reason to believe
that the airframe will become obsolete over the next decade and beyond. Whether for the above reasons or others, the
appraisal community has not materially altered its long-term future base value projections for the type.

The Dash 8-400 prospects and future value retention can be divided into older aircraft manufactured before 2010 and NG
variants that entered service from early that year. A number of airlines in Canada, Africa and a small number elsewhere
such as Widerøe in Norway that benefit from its performance characteristics (including range or greater speed) are likely
to underpin their longer term values for NG versions particularly as the production run of more recent vintage units was
restricted from 2010 onwards (Fig.3.6). For these, the average of appraiser depreciation profiles of 3-5 year old units over
the long-term is similar to ATR72-600s with initial near term base values around US$2million higher and converging to a
difference of around US$1million after ten years. For older pre-2010 examples excess supply is more likely to persist for some
years to come. Thus values are more likely to trend towards soft levels. Appraiser future market values have to some degree
accounted for this by ascribing values that are very similar to equivalent vintage ATR72s despite their initially higher values.
 54 | Turboprop Market Report

6.4 Lease Rate Trends in market

According to appraisers, new aircraft lease rates are at around US$130,000 per month for the ATR42-600 and
approaching US$170,000 for the ATR72-600 as shown in Figure 6.3. In the case of the latter this still represents a reduced
level compared to before the pandemic. As the Dash 8 production is paused no new lease rates are shown.

Figure 6.3 also tracks three, five and ten year old constant age Dash 8-400s and ATR42/72-600 lease rates since
inception of this variant in 2011. For the ATR42-600, this shows that used aircraft lease rentals followed a similar pattern
to new rates after 2016 with a more recent stabilisation. However, as there have been very few recent transitions (Fig.
5.3) the data points are limited to corroborate this trend. For the ATR72-600 lease rates for used aircraft trended
similarly to new rates from 2014 and dropped faster during the early pandemic period until a stronger recovery occurred
in 2022. This partly reflected an excess supply of new aircraft delivered since 2014 which naturally impacted used values.
In practice some used ATR72-600s were placed at levels significantly below the appraised lease rates, but the more
recent uplift is supported by recent data points.

The Dash 8 lease rates for used aircraft up to 10 years old peaked in 2011 and have declined by 12-15% since that time,
and faster from the onset of COVID-19. Over the last year appraisers suggest that lease rates have recovered for
vintages up to 10 years old. These are all NG variants, but as the number of sale transitions has been limited (Fig 5.3)
there are few data points to be sure that this apparent trend is sustainable.

Figure 6.3: Turboprop Constant Age Lease Rates Over Time 2023

ATR42-600
180
160
140
120
100
80
60
40
11

12

13

14

15

16

17

18

19

20

21

22

23
20

20

20
20
20

20

20
20
20
20

20

20
20

ATR72-600
200

175

150

125

100

75

50
11

12

13

14

16

17

18

19

20

21

22

23
1
20

20

20
20
20

20

20
20
02
20

20

20
20

Dash 8-400
230
210
190
170
150
130
110
90
70
50
11

12

13

14

16

17

18

19

20

21

22

23
1
20

20

20
20
20

20

20
20
02
20

20

20
20

0 year 3 year 5 year 10 year

Source: TrueNoord analysis of average CMVs from Avitas, mba & Ascend by Cirium
 Turboprop Market Report | 55

Angus von Schoenberg

Industry Officer, TrueNoord

Angus is an Economics & Business graduate of Trinity College, Dublin and an Air
Transport Management postgraduate of Cranfield University.

As Industry Officer for TrueNoord, he deploys his extensive experience in the regional
aircraft market to develop its investment process as it seeks to both manage and expand
its existing fleet of aircraft with appropriate leasing solutions for the regional market.
[email protected] truenoord.com

AMSTERDAM | DUBLIN | LONDON | SINGAPORE