A Commercial Aviation Consultancy

AirInsight has published another of its industry studies by the above title.  The regional market is called dynamic because there is so much activity in the ~100 seat segment. This market segment has typically been a graveyard.

The success of Embraer with its E-Jets proved that airlines see a need for the size airplane.  An early pioneer of this segment was the DC-9. But that airplane kept on growing larger and heavier.  Larger airplanes that shrank into this segment like the A318 and 737-600 proved less than popular because they are too heavy. The best way in this market is to enter from bottom or come up with something new.

This segment is tough and unforgiving.  It is squeezed by growing turboprops, which are already at 75 seats (maybe going to 90) that are nearly as fast and quiet while being much more fuel efficient on segments under 300 miles.  Above the 100 seat segment are two compelling airplanes, the A320 and the 737 families.  Taking on both Airbus and Boeing in their bread and butter programs is not a smart thing to do unless you have unlimited resources. This may not be a large market, though Bombardier sees a potential of  a few thousand airplanes over the next 20 years.

The buffer in the regional segment is small. Bombardier is at ~100 seats with its CRJ1000. Embraer brackets the segment and, soon, so will Superjet.  The latter has already had surprising success outside the CIS. AVIC’s ARJ is trying to break in and though it is unlikely to be a big seller, every sale it makes means one less CRJ or E-Jet sale.  Its role as a spoiler is clear.  Then there is Mitsubishi, and even though it does not have a big customer base, it cannot be dismissed. Though recent events in Japan may slow down the program a lot more than anyone will discuss now.

There is a lot of action going on in this segment.  Part of the reason is that emerging markets (China and India especially) offer attractive opportunities.

You can buy the report here.

© 2011, Addison Schonland. All rights reserved.

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