The worldwide regional aviation industry will need 4,016 aircraft valued at about USD123 billion over the next decade, according to Forecast International, which indicated jets would account for 64% of deliveries between 2010 and 2019.
Meanwhile, GE said at the European Regions Airline Association meeting that new turboprops using the GE38 could appear on the market as early at 2015. General Manager Commercial Engines Chuck Nugent repeated his prediction made at this year’s Regional Airline Association meeting in May that GE sees turboprop deliveries numbering 1,800 engines over the next 20 years. Both Bombardier and ATR forecast increased turboprop demand.
US regional market changes drive jet vs turboprop debate
Embraer, Bombardier and ATR will maintain their pre-eminence in the market as new entrant manufacturers enter operations including Comac with its ARJ21 regional jet, Mitsubishi with the Mitsubishi Regional Jet (MRJ), and the Russian firm Sukhoi Civil Aircraft with the Superjet 100. In the sweet spot is Bombardier, however, with both jets and turboprops on offer. Mitsubishi recently began production on the MRJ aircraft which will compete in the larger end of the regional market and is scheduled to enter service in 2014, a year after the CSeries.
The forecast comes at a time of great flux in the regional airline industry. While hit hard during the recession, their future could either continue the contraction seen since 2008 or could play a larger role in mainline feed than they have in the past. It all depends on the continuing scope issue and a revelation of just what mainline carriers have in mind for their domestic service. That, too, has been retracting not only because of the recession but the increasing market share of low-cost carriers. The question remains whether mainlines will continue to outsource to less expensive operators as they try to compete on price with LCCs. Even so, they cannot contract too much because they need a robust mainline feed to keep their international routes profitable. Indeed, some routes do not make economic sense were it not for their regional feed.
It is this uncertainty that is driving the questions surrounding the next generation regional aircraft and whether or not they will be re-engined or clean-sheet designs. Embraer, in particular, has been expressing how unclear the signals are from regionals or their mainline partners.
Forecast International noted an influx of new models at the top end of the regional market, exemplified by Bombardier’s developing CSeries, a new family of 100-145 seat aircraft that transcends the boundary between the regional jet market and the large airliner market. The CSeries competes against large regional jets from Embraer and others, and also against narrowbody airliners such as the Airbus A319 and the Boeing 737-700. Here, too, much depends on what transpires between the legacies and their pilots.
"The challenge from the CSeries has become a prime consideration for Airbus and Boeing as they make development decisions regarding their narrowbody families," said Senior Aerospace Analyst Raymond Jaworowski. “Embraer is well-positioned in the 70-125 seat market with its E-Jets series regional jets, and has been pondering future development strategy. Among the options being considered by the Brazilian company are a re-engining of the E-Jets family and/or a larger, all-new aircraft family. The latter would compete in the market above 125 seats, taking on Bombardier's CSeries.”
The company agreed the future of regionals is unclear given the economy. Although a recovery is underway and block hours are increasing, it could stall or drop back into recession. In addition, mainlines are redefining their relationship with regionals especially with respect to exchanging the lucrative fee-per-departure contracts with another, as yet, unknown formula which assumes much more risk than they have in the past.