New Study Projects Over 4,000 Regional Aircraft To Be Built In
Next Nine Years
In a new study, “The Market for Regional Transport
Aircraft,” Forecast International projects that 4,198
regional aircraft will be built from 2011 through 2020. The
Connecticut-based research firm estimates the value of this
production at $130 billion in constant 2011 U.S. dollars. The
forecast includes both jet-powered and turboprop-powered regional
aircraft, with jets accounting for just over 60 percent of the
total unit production.
The study indicates that Bombardier, Embraer, and ATR will be
the leaders among regional aircraft manufacturers during the
2011-2020 period. Bombardier, with a product line that includes
jets and turboprops, is expected to build 1,278 regional aircraft
during the timeframe, representing a 30.4 percent share of the
market. Embraer specializes in jets, and the study predicts that
the Brazilian company will produce 992 regional jets for a 23.6
percent market share. Turboprop manufacturer ATR is expected to
build 668 aircraft, representing a 15.9 percent share.
According to the study, the regional aircraft market is entering
a period of transition and transformation. The regional airline
industry is consolidating as large holding companies gain control
of multiple carriers. This is especially true in the large U.S.
market, where companies such as Pinnacle, Republic, and SkyWest
each control a number of airline brands. According to Forecast
International senior aerospace analyst Raymond Jaworowski, "The
size of the large regional powerhouses affords better economies of
scale, more diverse teaming arrangements (and increased negotiating
leverage) with the major airlines, and, potentially, greater
revenue streams."
Meanwhile, opportunities for growth in the regional airline
sector will be somewhat limited, especially in mature air travel
markets such as the U.S. and Europe. The majors themselves are
consolidating, and regional carriers will be competing for a
shrinking number of opportunities to provide hub feeder service to
the majors' networks.
One way for regional carriers to grow revenue in the years ahead
will be to fly larger aircraft. In the U.S. in particular, though,
scope clauses generally prevent regional carriers partnered with
major airlines from flying jets larger than 70 or 76 seats.
Nevertheless, other regionals, low-fare carriers, and even major
airlines can be expected to acquire 90-125 seat regional aircraft
in quantity.