Previously we looked at the Fokker fleet and the opportunities it presents to the current OEMs. Today we look at the BAe fleet. In total there are 342 aircraft in service. Of these 267 (see first table) are in passenger service. The fleet consists of the older generation BAe 146 and then the newer Avro RJs.Based on the table it is clear that once again we see market opportunities for the small duopoly. The fact that there are new entrants such as SuperJet and Mitsubishi only serve to add to the competitive pressure to rapidly swing these replacements into orders. As we saw with KLM’s E-Jet order, delivery timing could be a huge advantage.
So where are the opportunities? The table below lists the key markets for both the older and newer generation aircraft. As the table shows, overall these are old planes that will need to be replaced within the next five years. The 146s are certainly ready to be replaced now, and were sanctions lifted, we expect to see Iran’s airlines hasten to do this. The RJs are a bit younger, but are also aging fast. These are aircraft that have a lot of cycles and age faster than long range aircraft.Next let’s look at the operators of the fleet. This should identify where the campaigns are going to happen or are already underway. For example, the fleet in Sweden is Malmo and they have decided to leap forward with the brand new CS100. Swiss also selected the CS100. But as the table shows there are a number of interesting opportunities left.
As a volume business, replacing the BAe fleet is not fabulous. After all it is only 342 in total. But then look at how tight the 100-140 seat segment is becoming. The duopoly in the segment has two competitors at the gate, eager to enter and determined to win. Among the names listed in the table above, few are well known brands or associated with global brands.
TAM here is Transportes Aéreos Militares, the Bolivian Air Force. Swiss, Brussels and South African are names that can be described as well known or part of a bigger brand. These companies can probably get attractive deals done with the potential vendors. TAM is a big Airbus customer, but can it avoid buying from Embraer? Will Brussels follow Swiss or Austrian as it decides on what to do next? The decision is made in Frankfurt and is surely under consideration. SAA is bankrupt and any OEM will, or should be, wary about chasing a deal.
Cityjet represents a special interesting case and we are aware they are in the midst of a refresh evaluation. The decision was meant to have been made months ago. It already selected the SuperJet to replace its Fokker 50s, so the selection process is bound to be very interesting and extremely competitive.
Another interesting airline is Australia’ Cobham. Besides its BAe fleet, it also operates 18 717s for QantasLink. Delta probably wants those 717s sooner rather than later. Here is an opportunity the four OEMs must be eying closely.
The remaining brands are good for small orders and probably not too exciting – besides these airlines are probably going to be primarily driven by capital costs, so bottom fishing is where it will go. Which means newer second hand aircraft come into play. Every campaign is really important to win. Even adding the 339 Fokkers, it does not look like the total market is sufficient for all four OEMs to make a living.