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Last Updated: Monday, 29 October 2007, 13:20 GMT
Profit fear as SAS grounds planes
SAS plane makes emergency landing at Aalborg airport, Denmark - 9/9/07
SAS fears problems with the plane could damage its image
A decision to permanently ground 27 planes over safety fears will cost SAS up to 400m crowns ($62m; 30m), the Scandinavian airline has said.

The airline faces cancelling hundreds of flights after it decided to stop flying Bombardier Q400 turboprop planes due to landing gear problems.

The decision came after the airline's third incident involving its fleet of Canadian-made Bombardier in two months.

Shares in the airline slid as much as 7.7% on the profit warning.

"Taking these planes out of capacity will definitely impact earnings next year, although it's difficult to say to what extent, " said Jyske Bank's Michael Nielsen.

The airline operates 27 of the Q400s, which are used on many Nordic regional routes and for connections to destinations including the UK, Germany, Poland and Luxembourg.

SAS cancelled more than 40 flights on Sunday and 60 flights on Monday.

SAS said that since it began using the planes in 2000, they had accounted for about 5% of all passengers carried.

It would look to fill the gap in schedules by reallocating planes in its current fleet and by leasing aircraft, it said.

Lease replacements

The decision to permanently stop using the aircraft followed a plane carrying 44 people from Bergen, Norway, to Copenhagen having to make an emergency landing in Denmark on Saturday.

"Confidence in the Q400 has diminished considerably and our customers are becoming increasingly doubtful about flying in this type of aircraft," chief executive Mats Jansson said over the weekend.

In September, Bombardier grounded almost half of its Q400 turboprop planes after equipment failures forced emergency landings of SAS planes in Denmark and Lithuania.

At the time of the move, the Montreal-based company said that the groundings were a "precautionary measure", adding it believed its aircraft were "absolutely safe and reliable".

The Q400 turboprop - which carries between 68 and 78 passengers - has been in use since 2000, and more than 160 of the planes have been delivered around the world.

In March, an All Nippon Airways Q400 plane carrying 56 passengers and four crew landed safely after its nose gear failed to descend.

SEE ALSO
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19 Feb 07 |  Northern Ireland

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