Take a look at this chart of the 2014 in service passenger airliner fleet. In our view this provides a very useful breakdown of the OEMs by seat segment. It also highlights some opportunities for new business. The OEMs listed as N/A are no longer in the business. This means their fleets are up for renewal by the remaining players.
There are 195 aircraft in the sub-50 seat segment that are “open season”. ATR is the only player left in the segment. ATR can replace the SAAB 340s and Dornier 328s. ATR also stands to do well in the 50-seat segment replacing Fokker 28s, 50s and SAAB 2000s.
The next big market opportunity is the 71-90 seat segment. There are 145 Avro/BAe 146s DC-9s and Fokker 70s to replace. Current offerings from Bombardier and Embraer look good here. Superjet will eye every chance it can get, too. In a few years, Mitsubishi will also want to edge into the segment. Expect a fight for every order. We don’t think the segment can handle this many OEMs. The entire segment is 1,770 – probably not enough to sustain four.
Another opportunity exists between 91-100 seats. The MD-87s, DC-9s and Fokker 100s add up to 272 aircraft. Again we expect Bombardier and Embraer to be focusing on these replacement opportunities.
The final big opportunity looks to be in the 131-150 segment. This is touchy territory because the big duopoly watches this space closely and would not welcome Bombardier and Embraer entering it. Nor will they give COMAC any edge. But, the smaller duopoly will soon have better offerings to replace the DC-9s, MD-80s and even MD-90s. However, there is likely to be a reaction from Airbus and Boeing, trying to move operators up a stage and discount to win the business. It will be messy. The replacement opportunity looks like being about 700 aircraft.
American is offloading its MD jets for newer equipment, typically A319s and 737-800s. It could take many years for the likes of a Delta Air Lines to consider retiring its aging MD fleet. Eventually even Delta gets rid of old airplanes. Those in this segment plus the 717s it is still buying up will need to go eventually. Bombardier, COMAC and Embraer will be there, eager to snap at any opportunity. Will Airbus and Boeing still be looking at this segment by 2020?