SAS, Bombardier, Goodrich settle on Q400 compensation

 - April 2, 2008, 5:34 AM

Scandinavian Airlines (SAS) has settled with Bombardier and Goodrich Aerospace the terms of a compensation agreement stemming from the airline’s grounding of its entire fleet of 27 Q400s last year. Although it would not disclose the precise conditions, SAS said the value of the compensation it will receive slightly exceeds 1 billion Swedish crowns ($163.5 million) in cash and credits for future firm and optional aircraft orders. As part of the agreement, the board of directors of SAS has approved a firm order for 14 new Q400s and 13 CRJ900s, with an option for a further 24 aircraft.

Plans call for SAS and partner airline Estonian Air to fly all the CRJ900s and leave the Q400s to subsidiaries Wideroe Flyveselskap and Air Baltic. SAS Group expects deliveries to begin this autumn and continue into 2011.

SAS said it expects to incur charges of SEK400 million ($65.53 million) in this year’s first quarter. That follows a charge of SEK500 million ($81.91 million) SAS took during last year’s fourth quarter, when three separate incidents involving landing-gear failure led the airline to ground its entire fleet of Q400s.

Notwithstanding Bombardier’s willingness to negotiate with SAS, neither Danish nor Canadian civil aviation authorities have found a design defect to which they could definitively assign blame for the landing gear problems.

Investigators attributed the last accident, which occurred on October 27 as an SAS Q400’s right main landing gear failed to extend fully upon landing at Copenhagen International Airport, to a loose o-ring that blocked an orifice within the gear’s actuator assembly. Authorities blamed each of the first two accidents, in Aalborg, Denmark, on September 9 and in Vilnius, Lithuania, on September 12, on corrosion inside the landing gear’s actuator piston that caused it to separate from its rod end.

SAS claims it has found a defect in a solenoid valve in a majority of its 27
airplanes that could explain the October 27 incident.

For its part, Bombardier said it performed a full review of the landing gear system with its manufacturer, Goodrich Aerospace, and the results “have confirmed its safe design and operational integrity.”