The commercial aerospace programs under development in Brazil, Canada, China, Japan and Russia will soon challenge the dominance of Boeing and Airbus for commercial aircraft between 100 and 210 seats, according to a new report released by AirInsight. The new report entitled, “The Coming Aerospace Squeeze - A review of commercial aircraft programs in Brazil, Canada, China, Japan and Russia", predicts a shift in production from the US and EU to new competitors "will have a significant impact on the US, France, Germany, Spain and the UK".
The 100-210 seat narrowbody segment is forecast to include 16,977 new aircraft valued at over USD850 billion over the next 20 years. According to the report, "any business opportunity of such magnitude is always attractive in terms of employment, jobs, and is a target for politicians. Consequently, government support of aerospace is commonplace, as demonstrated by the WTO cases against Airbus and Boeing". It adds, "as politicians in Brazil, Canada, Japan, Russia and China examined the market for commercial aircraft, they have all sought to extend their national participation through financial support".
The 57-page report summarizes current and planned aircraft programs in each of these countries and the potential impact of those programs on the commercial aerospace market. The report provides insight into emerging programs ranging from the five countries, including China's COMAC C919, Japan's Kawasaki YPX, Canada's CSeries and Russia's UAC MS-21, and their potential impact on Boeing and Airbus. The study also examines the new regional jet programs: China’s ARJ21, Japan’s MRJ and Russia’s Superjet, and the impacts faced by the four current players, Airbus Boeing, Embraer, and Bombardier, to meet this new competition.
Among the conclusions in the study:
- Airbus and Boeing currently have about an 88% market share in the 100- to 200-seat single-aisle market segment. This market share could be cut in half to about 40% if market forecasts offered by the emerging competitors bear any relationship to reality;
- Technology transfers by the current Big 4—Airbus, Boeing, Bombardier and Embraer—are enabling these new competitors;
- Airbus and Boeing will likely choose to re-engine their stalwart A320 and 737 families as an interim solution to meeting the new competition, while continuing to develop advanced-technology replacements for introduction in the 2020 decade;
- The sub-70 seat regional jet market is rapidly losing attractiveness. Bombardier is considering larger turboprops and Mitsubishi is considering a larger version of its MRJ;
- Embraer faces a tough decision about what to do with its E-Jet series, which is still relatively new to market, to meet the competition from Bombardier’s CSeries.
“Boeing and Airbus are feeding the hand that will come back to bite them”, said co-author Ernest S. Arvai, of The Arvai Group, who indicated that “technology transfer to emerging aerospace countries is enabling new competitors who will each take a piece of the market. Our projections indicate that the 100-200 seat market shared by Airbus and Boeing with an 88% market share today could see that share fall to nearly 40% if all of the new competitors are successful and achieve their market goals. While that is unlikely, a significant market share shift will occur over the next two decades, and additional industry capacity will have an impact on the supply/demand balance, pricing and margins.”
“New entrants for the 150-seat market segment in China, Russia and potentially Japan will have an impact on Airbus and Boeing,” said co-author Scott Hamilton of Leeham Co. LLC. “While we don’t expect these programs to be particularly successful outside the home markets, these domestic sales will significantly eat into the market shares of Airbus and Boeing. To compete effectively, Airbus and Boeing will need to re-engine their current models around 2015, and introduce break-through technology in the 2020-2024 time frame to leap-frog these emerging competitors.”
“For the first time, a new generation of engine technology will be introduced by firms other than Airbus or Boeing, as the geared turbo-fan from Pratt & Whitney will launch with the Bombardier CSeries. While aerodynamics and materials have an impact on performance, engine technology is the primary driver for economic improvements, and the new international competitors will for the first time have the most efficient airplanes,” said co-author Addison Schonland of Innovation Analysis Group.
Click here for more information about the report.
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