Premium #165 – Our 111-140 Seat Segment Survey |

Over the past ten days we conducted a survey among a group of industry professionals, who we believe to be credible sources of insight, regarding the 111-140 seats segment of the commercial aircraft market. Survey invitees comprise a group that is influential, but since it is not random, cannot be called a scientific random industry survey. We achieved a response rate of 26% from invitees, which is a higher than typical response rate for an online survey, and feel confident that the results reflect a good balance of industry opinion. Our respondents were well balanced across the segments of the industry they represent, as shown in the following pie-chart: In terms of geographic location, our respondents tended to be North American and European, as shown below: We asked participants about how they viewed the 110-149 seats segment for commercial aircraft. Responses were interesting, with nearly a balance between positive, negative, and neutral responses. We illustrated the responses that were negative (deathbed and fading) in red, holding its own in yellow, and growing for right sizing and a new technology incubator as positive responses in green. As the chart below shows, 30% were negative, 31% positive, and 39% neutral on this segment. The survey results tend to match the uncertainty we find when discussing this sector with various players in the industry. Some are positive of the need to “right size” airplanes and see a strong market for both replacement and growth. Others see pressures for seat-mile economics driving airlines to purchase larger airplanes, leaving inadequate demand to support the four manufacturers currently participating in this sector. One hypothesis that can be made is that the industry remains uncertain because there has been a shift in demand to larger aircraft recently, but the next generation offerings from Bombardier and Embraer, which will be more efficient, could potentially reverse that trend with attractive economics, disrupting the incumbents (Airbus and Boeing) in this segment.Taking a look at the responses by segment, we note the following:Taking these results and scoring them, with 5 points for the most positive and 1 point for the most negative responses, the average by industry segment is shown in the following table: Two industry segments, aerospace and lessors, were above average and positively disposed to the segment, while the airline, appraiser and financial communities were all slightly below neutral. Media respondents had the most negative view of the segment. Aircraft Serving the 100-149 Seats Segment We also asked about each type of aircraft serving the 100-149 seats segment. The questions were structured so respondents could assess each aircraft type separately. We assembled a summary of their views together in one chart, which is shown below: Based on the chart we think the message about the Airbus and Boeing offerings in the segment are clear – they are seen as outclassed. Of these, the A319neo has the most overall negative outlook. But the 737-7MAX has the singularly worst ratings in terms of “very negative.” However, it also has a better positive rating than the A319neo. Next looking at the two Bombardier aircraft, we note the CS100 has a distinctly different rating than the CS300. Industry observers often speak of the industry “up-gauging”. Perhaps we see some of that here too. The CS100’s single largest rating is negative. For the CS300 we see a much more positive outlook – the aircraft has the highest number of very positive ratings. Bear in mind the CS100 is the smallest aircraft among this group coming in at 110 seats. Using a scale of 5-point scale, where very positive is 5 and very negative is 1, with the other answers scaled in-between, we can compute the average for each type, which is shown in the following table: Both Embraer aircraft have strong results, with the E2-195 having the highest average scope and the E2-190 in third place. The Bombardier CS300 is second highest and generated the highest number of very positive scores, while the CS100 ranked somewhat lower in fourth place. The offerings from Boeing and Airbus were fifth and sixth, respectively. Expectations for On-Time Deliveries We then asked about whether the respondents expected the projected entry into service dates to be met. For new aircraft types, this has become an industry challenge, with Airbus, Boeing and Bombardier running late on new programs. The following chart illustrates respondents’ views on Entry into Service. Airbus and Boeing rate highly and Bombardier is rated most negatively. Bear in mind that our survey respondents are industry participants who are well aware of the latest announcements and are well connected to the industry rumor mill. It appears there is a general lack of confidence facing Bombardier, as not one respondent expects the CSeries program to be on time. Respondents seem to believe that Airbus and Boeing are working on relatively low risk programs and have learned tough lessons from previous delays. Embraer, following the Airbus and Boeing model, may also benefit from only being under pressure much later – with EIS scheduled for 2018 and 2019 for their programs in this segment. As the only clean sheet program, Bombardier’s CSeries certainly reflects the uncertainty and risk concomitant with such a program, as well as a lack of confidence from previous program delays. Which Program will be Most Successful? Our final question asked which of these aircraft would be best selling model in the 111-140 seats segment. As shown in the following chart, respondents favored the CS300 as the potential best seller. Embraer’s E2-190 ranked second. Both Bombardier and Embraer tallied more support than Airbus and Boeing combined for this segment. If our respondents are correct, the CS300 looks to be a successful aircraft. It is reassuring to note that this is consistent with the current order breakdown of CSeries, which shows the CS300 to be the far more popular of the two models.The Bottom Line: The 111-140 seat segment should be a battleground between Bombardier and Embraer for market superiority, as Airbus and Boeing focus on their larger models. While there are no clear winners yet, once the CSeries and E2-Jets enter service, this segment will likely also move to those lighter and more efficient models.

US Flight Planner	Airbus vs Boeing
US Airline Schedule Performance	Daily Production & Deliveries

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