Is the Dash 8 dead?

Only good aircraft can stay in production for nearly 40 years. Manufacturers, governments, and airlines must all find true value in the plane, and even then, success isn’t guaranteed. This makes the success of the Dash 8 even more impressive; the type has survived 4 ownership changes, a constantly shifting aviation market, and the apparently imminent demise of turboprops thanks to regional jets.

These challenges pale in comparison to COVID-19.

De Havilland Canada (DHC) recently paused production of the Dash 8, promising to resume production and delivery when market demand recovers – which they strongly believe will happen eventually.

“We fully expect worldwide demand for the Dash 8 to return once the industry has recovered from the pandemic.” - David Curtis, executive chairman of Longview Aviation Capital, parent company of De Havilland Canada

The optimism is admirable, but many were skeptical. Will there be demand for new Dash 8 production? This article is my stab at answering this question.

I see demand for new aircraft as a function of:

1. General demand for Dash 8s
2. Supply of Dash 8s on the market (i.e. not from new production)

If 1) is greater than 2), then production of new Dash 8s will be necessary. This might seem high-level, but it frames the problem in a solvable manner. For brevity and relevancy, I limited this analysis with several assumptions:

• 20-year time frame; essentially until 2040
• Turboprops will refer to the medium/large turboprop segment i.e. 50+ seats
• Dash 8 will refer to Dash 8-300s and -400s (50, 80+ seats)

Demand

Our goal for this section is to arrive at an estimate – realistically a range – for how many Dash 8s will be demanded before 2040. I'll approximate this using:

(Number of turboprops demanded) x (Dash 8 market share)

Let’s explore each variable.

• Number of turboprops demanded: Replacing existing planes and Net growth e.g. new routes or service expansions.
• Market share of Dash 8: There are no concrete determinants of market share, but the following factors are relevant in this context:
  • Finances – both the initial and operating costs e.g. aircraft price and fuel consumption, respectively
  • Flight quality – the characteristics that would favour an aircraft e.g. high climb rate, quiet passenger experience
  • Service – the interaction and support airlines receive from manufacturers

The values of these 2 variables then differ vastly across the following segments:

• Different aircraft types: passenger, freighters, special uses (e.g. aerial firefighting)
• Region: Africa, Asia Pacific, Europe, North America, South America

We’ll determine the appropriate values for these segments individually, then combine them to reach our demand estimate.

Passenger

Number of turboprops demanded

From a pre-pandemic fleet size of approximately 2000, estimates for the year 2040 range from a conservative slight decline to an optimistic near-doubling – depending on who you ask, of course. These extremes provide lower and upper bounds when examining the 2 sources of new turboprops:

Demand source	Lower bound	Upper bound
Replace existing	800 (~40% of existing fleet)	1220 (~60% of existing fleet)
Net growth	0	1800
Total passenger turboprop demand	800	3020

The lower bound reflects a bearish attitude on turboprops prevalent across external observers like Oliver Wyman, in addition to an estimated 10% decrease in demand from COVID. The upper bound is supported by players within the market, such as turboprop manufacturer ATR, and rests on a full recovery from the pandemic.

Market share of Dash 8

This will be estimated using pre-COVID statistics for each region; the pandemic is not expected to significantly alter the market balance between the Dash 8 and ATR models. The exception is Europe: Air Baltic, Austrian, Eurowings, and Flybe have all publicly announced the expedited retirement of their Dash 8s – in Flybe’s case, the entire airline was retired.

The Dash 8’s superior characteristics, namely higher engine power, climb rates, and cruise speeds, have endeared the aircraft to the African and North American markets; such performance is necessary for long or hot-and-high flights.

However, the Dash 8 lags severely in the key growth markets of Asia and South America, where these capabilities are less relevant and actually translate into higher operating costs. With the aforementioned softness in European demand, the ATR is clearly dominant on a global level.

Combining both variables

Region	Dash 8 market share	Lower bound	Upper bound
Africa	56.3%	44	167
Asia	29.0%	100	377
Europe	24.1%	38	145
Middle East	6.7%	1	4
North America	65.1%	60	228
South America	0.6%	1	3
Total Dash 8 passenger demand		245	924

It appears that at least 245 Dash 8s will be demanded for passenger purposes over the next 2 decades, with an optimistic ceiling of ~925 aircraft.

These estimates loosely account for regional differences in air travel recoveries from COVID-19; the assumptions restricting the lower bound were therefore set conservatively.

Freighter

Number of turboprops demanded

This figure is less straightforward to estimate than passenger demand for 2 main reasons: existing fleet sizes are less well-documented than passenger aircraft, and the pandemic could significantly alter the usage patterns of freighters.

It’s likely that COVID-19 has increased future demand for freight turboprops; with the hastened rise of e-commerce – of which the effects on Canada were discussed in our previous article about Cargojet – regional cargo will likely grow faster than initially expected. Air cargo operators are extremely price sensitive, making cost-efficient turboprops the preferred option to regional jets; the difference in flight times is more negligible for short, regional routes.

This rise in regional cargo is more relevant in North America and Africa, where far distances and harsh terrain make rail or road alternatives unattractive. Unfortunately, regional fleet size breakdowns are unreliable, rendering this section a more general global view.

Demand source	Lower bound	Upper bound
Replace existing	135 (~40% of existing fleet)	200 (~60% of existing fleet)
Net growth	0	270 (~4% YoY growth)
Total freighter turboprop demand	135	470

Market share of Dash 8

This figure is also difficult to ascertain. The large regional freight market – approximately 8 tonnes of cargo capacity – has evolved significantly due to the pandemic, and will likely see more change in the future.

ATR and DHC once again dominate the category; the purpose-built ATR 72-600F debuted in late 2020 for FedEx, while the Dash 8 Q400 received a Simplified Package Freighter conversion in response to outsized demand for medical supplies. With both models being so new, determining future market share is more estimation than certainty.

The Dash 8 Q400 currently holds a 30% share in the freighter market; however, this proportion reflects a very small sample and will likely increase.

The Q400 has not been widely used as a freighter prior to the pandemic, being seen as a passenger-first plane, so cargo carriers may not be familiar with the Dash 8 as an option. DHC can also be expected to formalise freighter conversions or offer a dedicated cargo carrying model, further strengthening the Dash 8’s future market share.

With superior flight characteristics to the ATR 72, the Dash 8 will likely continue performing well in Africa and North America, coincidentally the same regions that can expect high growth in regional cargo.

Combining both variables

	Dash 8 market share	Lower bound	Upper bound
Total Dash 8 freight demand	30%	41	141

Demand for at least 41 Dash 8 freighters can be expected, with a looser upper bound of around 141 planes.

Special uses

The flight strengths of the Dash 8 – namely higher engine power, climb rates, and pure speed – translate into a stronghold on most special turboprop uses.

Compared to the ATR 72, the Dash 8 can clear more than double the terrain height just 1km after takeoff while reaching cruising altitude a full 5 minutes sooner – a higher altitude that allows for better weather avoidance, no less. These capabilities are crucial for special uses like aerial firefighting, where fuel efficiency is of a slightly less concern.

Regardless, the total demand for special use aircraft is likely to be insignificant, especially when compared to passenger and freighter demand. Conair recently acquired 11 Dash 8s for conversion into aerial tankers, for example, but these major transactions are infrequent.

Supply

This refers to the number of available Dash 8s that are not newly produced.

These planes must be suitable for their intended use; for example, Dash 8s that are no longer fit for passenger use may be converted to freighters, but would not be considered as viable supply to address passenger demand.

Passenger supply

This estimate assumes that passenger-worthy Dash 8s will become available through airlines ceasing operations or prematurely retiring portions of their fleet.

In Europe, this has already happened with Air Baltic, Austrian, Eurowings, and Flybe; around 85 Q400s will become available over the coming few years, most of them still suitable for passenger use. The number would be higher but Conair – the Canadian aerial firefighting company – acquired 11 of Flybe’s retired aircraft.

Horizon Air, sister of Alaska Airlines, and Jazz, operating on behalf of Air Canada, will retire another 20 Dash 8s due to COVID-19.

Nobody knows how badly COVID will affect regional airlines, but ICAO estimates that demand could drop by 40% over the next few years. Using less extreme parameters, 25% of the existing fleet could face premature retirement, thereby becoming available to carry passengers.

Under these assumptions, approximately 215 passenger-worthy Dash 8s will become available over the next 20 years.

Freighter / special uses supply

For simplification, we’ll assume that 90% of the supply for freighters and special uses will be met by retiring passenger aircraft.

These estimates will likely be higher than in reality, the effects of which will be discussed later.

The result?

Usage	Lower bound	Midpoint	Upper bound
Passenger	30	370	709
Freighter	4	9	14
Total required Dash 8 production	34	379	723

Good news for DHC – there will likely be demand for new Dash 8 production over the next 20 years.

The question is how much demand.

The lower bound arguably under-predicts demand and over-predicts supply, resulting in a smaller difference. The upper bound is heavily influenced by projections from ATR, rendering it extremely optimistic with regards to turboprop demand.

A helpful reference is the midpoint, which suggests over 300 Dash 8s will be demanded over the next 2 decades.

This is not an insignificant amount, which helps DHC’s case that production will eventually resume. I can also guarantee you that they crunched the numbers before making that announcement.

It is important to note how this estimation assumes the maintenance of the current ATR-DHC status quo. A new entrant by Embraer, for example, could uproot these projections.

Personally, I feel that the turboprop market is poised for growth. A post-COVID world will likely place greater emphasis on regional connectivity and operational efficiency, generating newfound demand for turboprops.

The Dash 8 in particular is sneakily versatile, and DHC has many exciting options; creating a purpose-built freighter seems obvious, but updating the smaller Q300 could also help compete in the 50-seat range against the ATR 42.

Despite all the uncertainty surrounding aviation, one thing now appears more certain: Dash 8 production will restart – eventually.

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