Russia is set to significantly increase its expenditure on defence and national security according to a draft 2023 to 2025 budget.
Regional Aircraft Manufacturers Find Opportunities Amid Airline Tumult
Forecast International has released a new study, "The Market for Regional Transport Aircraft," in which the Connecticut-based research firm projects that a total of 4,066 regional aircraft worth $116 billion will be produced from 2008 through 2017. The total includes 2,826 regional jets and 1,240 regional turboprops.
In the current airline environment, regional airlines are feeling nearly as much financial pressure as the major carriers are, and while regionals can sometimes substantially outperform the majors during times of stress in the industry, this is not the case today.
Major airlines are consolidating their route networks and grounding aircraft, but they are not offloading routes to their regional partners. Capacity cuts instituted by a number of majors have extended to capacity flown by regional partners. And all this is occurring at a time when slowing passenger traffic and high fuel costs are making problematic the operating economics of regional jet aircraft. So, market factors are forcing many regionals to themselves undergo consolidation, rather than expand into service areas abandoned by the majors.
Against this tumultuous backdrop, the market for regional aircraft nevertheless continues to grow. While the market is certainly not booming, manufacturers are continuing to find opportunities to increase profits and expand market share. Regional turboprop airliners are experiencing a marked resurgence in demand, particularly for those models seating 70 passengers. Meanwhile, demand for regional jet airliners has been shifting upward to larger-capacity aircraft. As airlines increasingly park inefficient 50-seat regional jets, many of these aircraft will be replaced by 70-seat and larger aircraft.
The Forecast International study predicts that the top three regional aircraft manufacturers during the 2008-2017 time period will be Embraer, Bombardier, and ATR. Embraer is projected to build 1,440 regional jets valued at $47.1 billion. Bombardier is expected to produce 1,189 regional aircraft, including both jets and turboprops; the value of this production is estimated at $41.5 billion. ATR is forecast to build 458 regional turboprops valued at $8.3 billion.
Embraer's regional jet product line stretches out to 122 seats, putting the Brazilian company in an excellent position to exploit the growing demand for ever-larger regional jet aircraft. Bombardier's CRJ regional jet family tops out at 100 seats, but the Canadian firm recently launched the new 100-145 seat CSeries aircraft family. According to Forecast International Senior Aerospace Analyst Raymond Jaworowski, "Bombardier had been vulnerable to changing market dynamics at the top end of the regional jet market, and the CSeries is an attempt to address this vulnerability." Jaworowski adds, "With the ambitious CSeries project, Bombardier is doing more than playing catch-up to Embraer in the 100+ seat regional jet market. The CSeries will also directly challenge Airbus and Boeing in the narrowbody airliner market."
ATR and Bombardier are the two leading manufacturers of regional turboprops, and both are busy enhancing their turboprop product line-ups. Bombardier is marketing an improved version of its 70-seat Q400, called the Q400 NextGen, and is considering launch of a 90-passenger variant of the aircraft. ATR is developing improved -600 versions of its ATR 42 and ATR 72 turboprops, and the French/Italian company has also initiated design studies on a possible new family of 70-98 seat turboprops. Witnessing the robust demand in the turboprop market, Embraer is considering launch of a family of new turboprop airliners.
Forecast International, Inc., is a leading provider of Market Intelligence and Analysis in the areas of aerospace, defense, power systems and military electronics. Based in Newtown, Conn., USA, Forecast International specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide.
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