Airlines give propellers another spin

This explains why the 50-seat jet has become a financial albatross on many routes. On shorter trips, a jet's operational advantages quickly disappear. A jet uses large amounts of fuel on its departure "climb out" and works best financially when it's able to reach thin-air altitudes above 30,000 feet, zipping along at a normal cruise speed of 500 mph to 530 mph with a full payload. Regional jets work well on routes such as Los Angeles to San Francisco, Chicago to Dallas, Atlanta to Denver.

Shorten the route, though—and triple the price of fuel—and a new-generation, large turboprop starts making a lot more sense. "A, it holds a lot of people, B, it goes pretty fast, and C, it's more efficient on shorter routes," says Roger King, an airline analyst for CreditSights, an institutional research firm in New York.

A Q400 cruises at about 415 mph at an altitude of 25,000 feet. Alaska says the Q400 is the most efficient craft in Horizon's fleet, using 5.8 gallons of fuel per passenger on a 400-mile route, compared with 6.2 gallons on a larger, 88-seat CRJ900 Bombardier regional jet, and 7.7 gallons on a 72-seat E170 Embraer jet. Horizon acquired its first turboprops in the 1990s when it was unable to secure any 50-seat regional jets, says Rudi Schmidt, vice-president for finance at Horizon Air. Now, says Schmidt, "I have folks approach me all the time and say: 'Hey, you want 100 of them?' And I say: 'No, I don't even want one of them.'"

Of course, what makes sense financially to an airline may not wow a passenger. Many fliers recall turboprop travel as an unpleasantly cramped, noisy, smelly, bumpy proposition. Advocates of the new generation of props say technology has rendered those hardships a thing of the past. Vibration-tamping techniques help smooth choppiness from the plane's lower flight altitudes, while new noise-damping technologies muffle engine noise. The Q400 is "a turboprop that thinks it's a jet," quips Robert Deluce, CEO of Toronto's Porter Airlines, which flies the plane.

Public indifference?
Customer acceptance will be key, much as it is with the new generation of clean-diesel auto engines that are slowly making their way back into U.S. dealerships. Turboprops will become even more mainstream "when passengers become indifferent ... and they are indifferent on short-haul flights," says Donald Carty, former CEO of American Airlines (AMR), who now serves as chairman of Porter and Virgin America. "I think you're going to see a lot more of these types of aircraft these days."

Another factor that might work in prop planes' favor is that some consider them "greener." Bombardier says its plane burns 30% less fuel than comparably-sized jets and emits 30% less carbon. A turboprop's maintenance costs run slightly higher than a jet, but pilot training and crew costs are lower.

The company says Q400 orders more than tripled, to 80 planes, in the 12 months ended Jan. 31 compared with the year-earlier period, giving it a total of 300 firm orders for the aircraft. The $27 million Q400 retails for slightly less than Bombardier's three regional jet models, which come in sizes between 70 and 100 seats and cost $30 million to $39 million. The company is studying whether to launch a stretched, 90-seat model, the Q400X, but no decisions have been made.

Still, don't expect all small, short-haul jets to disappear even if fuel prices continue climbing. They hold a certain appeal that goes beyond bottom-line economics. "Jets are sexy," admits Schmidt, the Horizon VP. "They're fast, they're pretty, blah, blah, blah."

Also in msnbc.com business Answer Desk: Overpaid and bailed-out at banks? Your Career: ADA expands to cover more workers Venza sorta-crossover is Toyota’s latest mistake ConsumerMan: Chinese drywall remains a big threat   Video: This beer would cost you at least $8,000

MORE FROM BUSINESSWEEK

BusinessWeek Section Front

Stock Picks: Wal-Mart, Hewlett-Packard, Brocade After AMD: Intel's Next Big Battle Stocks Fall as Dollar Rebounds Stocks Finish with Modest Gains How to Move Beyond the DIY Transition to Encore Careers The Case Against Retirement Stocks Finish Mixed Will Cigarette Maker Reynolds Try Kicking the Habit? Market Risk: Key Signals to Watch Now Why Google Is Buying AdMob BusinessWeek Section Front