As of the third quarter 2013 there were 28,525 commercial in service.  The table below illustrates the breakdown of this number. The shaded rows are OEMs that are no longer in the business of making commercial airliners.2014-02-19_9-09-08As the table shows there are many that have to be replaced by those firms still left in the market.  Note also that we list average aircraft age and these numbers show really airplanes out there.

For example, the British Company airplanes in service are a few VC-10s and BAC1-11s.  Five of the BAC1-11s are VIP aircraft, which are going to be replaced for sure.  The VC-10s are tankers being replaced by A330MRTTs.  This also the case with the Lockheeds which are L1011s, many of which are government owned.2014-02-19_9-15-17 If we add the older made by the CIS OEMs we can see there are nearly 4,000 aircraft that need replacement.  This is 14% of the fleet.  There are exceptions (Northwest springs to mind) but generally once an airliner is over 20 years old, it has passed its economic life.

An intriguing point here is that typically the defunct OEMs were operating in the 30-100 seat category.  This is the space occupied today by ATR, Bombardier and Embraer.  We think the market for replacing 914 BAe and Fokker look attractive for Bombardier and Embraer.

The market to replace the Douglas will, of course, attract Airbus and Boeing into the fight, though the average seating shows this to be more like the E2 and CSeries type of market.  That said, Airbus and Boeing have been successful at pushing into the higher seating brackets by making a compelling argument that you can replace fewer and fly high load factors.

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