We assembled this table from their announcements in Singapore to see how comparable their views are.
- As usual, the definitions are not quite the same. Bombardier excludes “Greater China”.
- The seat segments top out at the same number, but it’s not clear where Embraer starts their segment though one might expect at 76 to include the E175.
- Embraer sees a market 47% larger than Bombardier. But, if Bombardier were to include China their number would be higher. China is clearly a focus for Bombardier as they frequently talk about CAAC’s Rule 96.
- As a consequence of excluding China, we can see why Bombardier uses 16% as opposed to Embraer’s 29%.
- Note Bombardier forecasts a larger market in 20 years than does Embraer.
- Both Bombardier and Embraer see potential across the region connecting communities to hubs and other smaller communities.
- Bombardier is slightly more specific in its forecast.
As of 3Q17, there were 7,674 aircraft in service across the Asia/Pacific region. Breaking out the fleet into regional and single aisles we get this table.
Both Bombardier and Embraer are correct in seeing lots of fleet renewal opportunities. If we grant each company a preference in the renewal of their own fleets, we see there were only 43 regional jets to chase. Useful, but not exciting. Among single ailses, we have much more opportunity. This is principally because of the aging small Airbus and Boeing jets.
Airbus had 244 A319s that might be a shoo-in for the C Series if Airbus muscles customers to stay “on-side” when they come up for replacement. Boeing had 20 717s that Delta had not snatched. There were 737 Classics ripe for replacement. The 700NGs, like the A319s, were too new to replace. There were 28 MD-80s aging fast that need replacement plus 63 Fokkers. The Embraer fleet was very young at under five years on average.
All told there appeared to be ~5,000 single aisles and under 200 regional jets to pitch for over the next 20 years. If we throw in a growth factor – Asia is growing faster than any other air travel market – those numbers are bound to be much higher. That makes the Bombardier and Embraer forecasts look plausible.
The largest growth markets are going to be China and India. Both suffer from state imposed limits that curtail OEM ambitions. India lacks runways and other infrastructure. But that could be fixed over 20 years. China as a tightly controlled commercial aviation industry and its evolving Rule 96 limits new airline growth.
In summary, in the next five years, we see opportunities for about 150 single aisles and 41 regional jets. The Asian air travel market has grown fast and its fleet tends to be young. While the twenty-year forecast looks reasonable, replacements are going to be backloaded.
Bombardier and Embraer need to focus on new startups and adding smaller aircraft to current airline fleets. Current airlines need light aircraft to reach out across thin routes (as stated by Bombardier above) to feed their networks. Fortunately, Bombardier and Embraer do not need to fear any outside (i.e. local) competition for at least a decade.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.