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Dash8-400 Values Face Some Uncertainty as Viking Takes Over

November 26, 2018

Values of the Dash8-400 are expected to experience a measure of uncertainty due to the acquisition of the program by the experienced Viking company.

In November 2018, Longview Aviation Capital Corporation, the parent of Viking Air, announced its intention to acquire the Dash8-400 from Bombardier for $300 million. The deal is expected to be completed in the second half of 2019. The impact on the Dash8-400 is now being assessed. Viking has the experience to develop the product. Values of the -400 have been falling to some extent in recent years but not as much as might have been expected for a type that has such an extensive product life cycle. This is because neither Bombardier nor ATR have developed their existing products in terms of a stretch nor sought a replacement. This places the turboprop market at odds with other market segments which have seen replacements entering service, thereby displacing incumbent types and having a direct impact on values. While ATR is now exploring the possibility of a hybrid powered regional aircraft, it would appear that such technology is perhaps too long term and too costly for Viking. Viking will likely wish to focus on enhancing the existing product rather than consider a clean sheet design. In the event a new engine is installed this would perhaps have an impact on the values of the existing Dash8-400 but not as much as an all new offering. In the interim, it is likely that Viking will wish to focus on consolidating the position of the Dash8, reassuring operators of its competence. There are however, a large number of Dash8-400s in storage and with such an advancing age profile, more units can be expected to enter the used market undermining the type and the prospect of new sales.

The Dash8-400 has been in service for nearly 20 years having entered service in 2000. Orders number approximately 650 of which 585 have been delivered leaving a backlog of some 65 aircraft and equating to a modest 30-35 deliveries each year on average. The market value of a new Dash8-400NG is approximately $21 million. a level which has not seen much variation in recent years. The number of seats has been increased to a maximum of 90 with the first such unit having been delivered this year. The type though has suffered from a number of high profile incidents including the collapse of undercarriages.

Viking previously took over the Dash6 and CL414 products and has since secured a reasonable number of orders for its Dash6-400 product. The introduction of the Dash6-400 did not impact the values of the Dash6-300 which had ceased production many years earlier. Indeed, the Dash6-300 represents one of the most beneficial aircraft investments with current values higher than when the type was first delivered. In 1976 a new Dash6-300 would have cost some $700,000 – today the same aircraft is worth more than $2.5 million. Few other aircraft that remain in mainstream commercial service can boast such a sustained return. The sale of the Dash8-400 following on from the sale of the CSeries raises the prospect of changes to the CRJ line which is losing Bombardier money. Mitsubishi Aircraft Corporation may see some advantage in taking over the program with a view to supporting its own MRJ while eliminating a competitor.

 

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