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Regional aircraft the not-so quiet achievers on the first day at the Farnborough Airshow

Airbus and Boeing typically grab the headlines at the big airshows, but regional aircraft manufacturers had a particularly strong first day at the bi-annual Farnborough Airshow.

The smaller aircraft manufacturers – Embraer, Bombardier, Sukhoi, ATR, COMAC and Mitsubishi Aircraft Corporation – collectively announced firm and tentative orders for nearly 130 jets and turboprops, as well as options for another 120 aircraft.

With all orders and options included, the deals are valued at more than USD7.8 billion.

More orders are set to come through the airshow, as regional aircraft makers continue to see expanding demand for their aircraft. Air travel expansion in developing markets, aircraft up-sizing in the US and aircraft right-sizing in Europe, along with the next generation of 100+ seat regional jets and the ever-present drive for fuel efficiency are all creating a renewed interest in regional aircraft.

Farnborough Airshow Day 1 regional aircraft orders

Manufacturer

Customer

Type

Firm

Tentative

Option/

purchase right

List value

Embraer

Trans State

E-175 E2

50

0

50

USD2.4 billion

Bombardier

Falcon Aviation Services

CS300

2

   

USD153.6 million

Bombardier

Loong Air

CS100

 

20

 

USD1.28 billion

Bombardier

Petra Airlines

CS100

2

   

USD136.5 million

Bombardier

Petra Airlines

CS300

   

2

USD161.9 million

Bombardier

AirBaltic

CS300

3

   

USD228 million

Mitsubishi

Eastern Air Lines

MRJ90

 

20

20

USD1.68 billion

Sukhoi

Bek Air

SSJ 100

7

   

USD253.4 million

ATR

NAC

ATR 42-600

25

 

50

USD1.55 billion

COMAC

Yanshang Corp

ARJ21

1

   

N/A

COMAC

Nanshan Group

ARJ22

2

   

N/A

COMAC

Republic of Congo

ARJ23

3

   

N/A

Mitsubishi and Embraer cash in on the move to larger regional jets in the US

Mitsubishi Aircraft Corporation (MAC) signed an MoU with Eastern Air Lines Group for 20 MRJ90s, the larger of the two-aircraft Mitsubishi Regional Jet family. Eastern Air Lines Group also took purchase rights to an additional 20 MRJ90s. Mitsubishi Aircraft Corporation stated that based on this MoU, both companies will move forward to conclude a definitive agreement in the near future. Deliveries are scheduled to commence in 2019. The start-up airline is in the process of gaining US certification.

At list prices (based on previous MRJ90 order announcements), a firm order deal would be valued at around USD840 million, or USD1.68 billion if the purchase options are exercised.

MAC has 175 firm orders for the MRJ, of which 150 are from airlines in the US. Trans States Holdings has ordered 50 MRJ90s, and has another 50 aircraft on option. SkyWest Airlines has 100 MRJ90s on order and another 100 options. So far the only MRJ customer outside the US is Japan's All Nippon Airways, which has ordered 15 MRJ90s.

Also in the US, Embraer announced an order for 50 E175-E2 jets from Trans States Holdings. The agreement also includes options for an additional 50 units, taking the total order potential to 100 aircraft.

The Trans States' E175-E2s will be configured with 76 seats in a dual-class layout. Deliveries are scheduled to begin in Jun-2020.

The E-Jets E2 order is valued at approximately USD2.4 billion at list prices, but is subject to certain conditions. It will be added to Embraer’s firm order backlog when these conditions are met and final confirmation is received. Trans States Holdings is the parent company of Trans States Airlines, Compass Airlines and GoJet Airlines.

The Trans States Holdings firm order is another high volume win for Embraer in the US market. When the E-Jets E2 was launched, Embraer announced a firm order for 100 E175-E2s from US regional carrier SkyWest Airlines, and also an order for 25 E-190 E2s and E-195 E2s from International Finance Lease Corp (which has since been acquired by AerCap).

Embraer still has plenty of order announcements waiting in the wings for the E-Jets E2. When the manufacturer launched the aircraft in Jun-2013, it also announced it had signed letters of intent with five undisclosed airlines from Africa, Asia, Europe and Latin America for 65 orders for the E-Jets E2.

Bombardier signs major LoI in China, collects more small CSeries orders

Bombardier has won a series of orders for its larger-than-regional jet CSeries. The biggest is a letter of intent with Zhejiang Loong Airlines Co (Loong Air) for 20 CS100 aircraft. The CS100 is the smaller of the two-aircraft family, with capacity for around 110 seats. The order is valued at USD1.28 billion at the CS100 list price.

Also ordering the CSeries was Falcon Aviation Services, which signed a firm purchase agreement for two CS300 jetliners. The transaction is a conversion of an earlier letter of intent to acquire one CS300 aircraft and one option that was announced in Feb-2014. The order is valued at USD153.6 million.

Bombardier acquired another Middle East CSeries customer when Petra Airlines of Jordan signed a letter of intent to acquire two CS100s and took options for two CS300s. A firm order for the two CS100 aircraft would be valued at USD136.5 million. The order value would increase to USD298.4 million if the two options for CS300 aircraft are converted to firm orders.

Bombardier also unveiled Latvia-based Air Baltic Corporation as the previously announced undisclosed customer that had converted three option aircraft to firm on the original order contract in Feb-2014. The original order for 10 CSeries, with options for 10 more was finalised in Dec-2012. Based on the CS300 list price, the three firm aircraft order is valued at approximately USD228 million.

Not having the CSeries flying for Farnborough (due to an engine malfunction in testing which grounded the test fleet) was a public relations setback to Bombardier. Despite the CSeries remaining flightless since the end of May-2014, Bombardier is still confident the aircraft will meet its 2H2015 entry into service timetable.

ATR solidifies relationship with Nordica Aviation Capital

ATR is having a very good year, having announced 144 orders for year to 14-Jul-2014. This includes the first day of the airshow deal with Nordica Aviation Capital for 25 ATR 42-600s, as well as options for another 50 of the same aircraft. The deal is worth up to USD1.55 billion, if all options are exercised.

Deliveries will commence in 2015 and continue through to 2020. ATR welcomed the order, stating NAC is once again demonstrating its full confidence in the company and the smaller 50-seater ATR 42-600 series, “in response to operator demand and recognizing that the replacement market for sub 50-seat turboprops is very under-served”.

So far in 2013, the Airbus/Alenia Aermacchi JV has taken orders for 119 ATR 72-600s and 25 ATR 42-600s. It has also taken options for 112 aircraft. The 2014 contracts have a total value of over USD3.45 billion, increasing to USD6 billion if options are included. These sales represent an increase of 150% compared to the total sales for 2013.

ATR's order backlog has reached a record 325 aircraft (of which Nordic Aviation Capital accounts for 88 aircraft), valued at over USD8 billion. ATR has seen its order backlog increase 45% since the end of 2013, with production now secured for another four years.

Production at ATR has increased by more than a third in the past two years. ATR plans to deliver 80 aircraft in 2014, increasing to 95 in 2015 and 100 by 2016. The manufacturer delivered 73 aircraft in 2013.

Sukhoi announces Eastern European win for Superjet

Sukhoi has had limited sales success with the Sukhoi Regional Jet, with no sales since Aug-2013. Sukhoi Civil Aircraft Company (SCAC) has now broken the ordering drought, following an agreement with Bek Air of Kazakhstan for seven Sukhoi Superjet 100LR aircraft. At list price, the deal is worth USD253.4 million.

The aircraft will be configured with 103 seats in an all economy arrangement. Three aircraft are due to be delivered in 2015 and four in 2016. Bek Air is currently operating 14 domestic routes in Kazakhstan, handling up to 500,000 passengers p/a. In future the airline expects to expand its route network in Kazakhstan and establish new routes to Russia, Asia and the Middle East.

Sukhoi has logged nearly 300 orders for the SSJ 100 and has overcome the majority of aircraft issues and production glitches, enough to ensure the programme has a future. The company hopes to sell another 500 aircraft over the next decade, around 15% of the total projected regional aircraft market. Production is expected to reach 40-45 aircraft in 2014 and 50 aircraft in 2015.

SCAC is now developing stretched and longer range 110-120-seat version of the SSJ 100, having already announced a 108-seat high-density version. A business jet variant is also in the works. Winglets, reducing fuel burn by up to 3%, are due to appear on the aircraft in either 2016 or 2017.

Further down the lifecycle, Sukhoi has confirmed it will look to offer a 130-seat derivative version, combining lessons learned from the Superjet programme along with technology inherited from the Irkut MS-21 development programme. A design concept incorporating new engines and wings, is due to be completed in 2015.

SCAC president Andrew Kalinowski has announced that the company is involved in sales campaigns in Europe over deliveries and orders for the SSJ 100. SCAC still sees a "lot of potential customers" for the aircraft according to Mr Kalinowski. The aircraft is in the running to replace CityJet’s ageing BAE regional jets, in competition with the Embraer E190, and the Bombardier CS100.

Other markets are also beckoning. At the end of 2013, SCAC, Sberbank and the Abu Dhabi Investment Company (Invest AD) signed a tripartite agreement to market the aircraft in the Middle East. Sukhoi Superjet programme partner Alenia Aermacchi has also discussed adjusting the marketing programme for the aircraft to include Latin America, building on the success of the SSJ 100 with Mexican LCC Interjet.

AVIC collects more small orders for ARJ-21

Despite the long running delays with the ARJ-21 programme, Commercial Aircraft Corporation of China (COMAC) announced at Farnborough that it has received orders for six of the aircraft from three customers.

The customers are Yanshang Corp, with one aircraft which will serve as a business jet, Nanshan Group with two firm orders and Ministry of Transport of the Republic of Congo, which has ordered three ARJ-21s and will become the first African country to purchase and operate the aircraft. The orders bring total commitments for the ARJ-21 to 258.

COMAC announced earlier in 2014 that the initial entry into service target has been pushed back to the latter part of 1H2015, continuing a long-running series of delays, mostly related to redesigns prompted by findings from the flight test programme. Initial deliveries will be to Chinese carriers, with export orders to be filled from around 2017. COMAC plans to ramp production up slowly, targeting output of 20 aircraft p/a from 2018.

Regional aircraft demand is on the rise

Regional jets and turboprops are enjoying an increase in popularity, as airlines search for the most fuel efficient means of operation and manufacturers begin to introduce larger and more efficient types.

Boeing’s recently-released 2014 Current Market Outlook bears witness to the resurgence in demand for regional aircraft. The large commercial aircraft maker radically upped its demand forecast for regional jets between its 2013 and 2014 forecasts, raising projected demand from 2020 aircraft worth USD80 billion to 2490 aircraft worth USD100 billion.

Boeing’s forecast does not include an outlook for turboprops, but demand in the segment has been running above 100 aircraft p/a for each of the past four years.

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