Business

October 9, 2013

Forecast International predicts restrained growth in regional aircraft market

In Forecast International’s new study, “The Market for Regional Transport Aircraft,” the Connecticut-based market research firm predicts that 4,035 regional aircraft will be built from 2013 through 2022.

The value of this production, which includes both regional jets and regional turboprop airliners, is estimated at $141.8 billion in 2013 U.S. dollars.

In the new study, Forecast International projects that annual regional aircraft production will experience gradual, though steady, growth between 2013 and 2020.  The company expects 371 regional aircraft to be produced in 2013, with annual output rising to a peak of 486 aircraft in 2020.  A cyclical downturn is anticipated for 2021 and 2022, the final two years of the forecast period.

Increasing market demand for regional aircraft is being fueled by a number of factors, including rising air traffic on regional routes and a need for regional carriers to replace economically inefficient aircraft.  However, the Forecast International study points out that certain restraining factors exist that will place some limits on growth in the market.  For instance, the ongoing consolidation of major airlines has led to fewer opportunities for feeder work for regional carriers.  Too many regional airlines are chasing too few opportunities.

Other factors that will hamper market growth include increasing government regulation and the maturation of the U.S. and European air travel markets.  In addition, perhaps the most critical factor limiting market growth is the continuing existence of scope clauses in major airline pilot contracts, which restrict the size and number of aircraft that regional partners of major carriers can operate.  The maximum capacity permitted in most scope clauses in the U.S. market is 76 seats.

The existence of such scope clauses limits the overall growth that can be achieved in sales of regional jets seating 90 passengers or more.  Forecast International senior aerospace analyst Raymond Jaworowski said, “Scope clauses constitute an artificial barrier to natural growth in the regional jet market.  Demand in the market is already trending toward larger-capacity aircraft and, in the absence of scope clause limitations, this trend would strengthen and accelerate.”

Forecast International predicts that the leading regional aircraft manufacturers during the 2013-2022 timeframe will be Bombardier, Embraer, and ATR.  Bombardier is expected to lead the market in the number of aircraft produced, while Embraer is forecast to lead in the monetary value of production.  Bombardier is expected to produce 1,035 regional aircraft, worth $47.7 billion, during the forecast period.  Embraer is projected to build 1,018 regional aircraft, worth $49.5 billion.  ATR is expected to be third in both categories with production of 668 aircraft, worth $15.4 billion.

A number of new entrants are looking to challenge Bombardier and Embraer at the upper end of the regional jet market.  These new players include COMAC of China, Mitsubishi of Japan, and Sukhoi of Russia.




All of this week's top headlines to your email every Friday.


 
 

 

Headlines July 28, 2014

News: U.S. has lost track of weapons given to Afghanistan - The United States supplied almost three quarter of a million weapons to Afghanistan’s army and police since 2004, but the military cannot track where many of those arms have gone, a new report found. Bill to improve VA has $17 billion price tag - A bipartisan...
 
 

News Briefs July 28, 2014

Marines seek authorization for dolphin deaths The Marine Corps is asking for a five-year authorization from the National Marine Fisheries Service for incidental deaths of bottlenose dolphins during training exercises at a bombing and target range. The Sun Journal of New Bern, N.C., reports that Connie Barclay of the National Oceanic and Atmospheric Administration says...
 
 
Army photograph by David Vergun

Senior leaders explain Army’s drawdown plan

Army photograph by David Vergun No commander is happy when notified that a soldier from his or her command has been identified for early separation. But commanders personally notify those Soldiers and ensure participation in th...
 

 

Northrop Grumman awarded mission support services contract

The U.S. Army awarded Northrop Grumman a cost-plus-fixed-fee contract, with a potential value of $205 million, to continue providing mission logistics services in support of combat brigades training at the National Training Center in Fort Irwin, Calif. The contract covers one base year and two one-year options. Support will include the full range of mission...
 
 
Lockheed Martin photograph by Beth Groom

F-35 Rollout Marks U.S.-Australia Partnership Milestone

Lockheed Martin photograph by Beth Groom Royal Australian Air Force Air Marshal Geoff Brown delivers his remarks at the roll out ceremony for Australia’s first F-35. The official rollout of the first two F-35 Lightning II...
 
 
NASA/JPL-Caltech image

NASA’s Mars spacecraft maneuvers to prepare for close comet flyby

NASA/JPL-Caltech image This graphic depicts the orbit of comet C/2013 A1 Siding Spring as it swings around the sun in 2014. On Oct. 19, the comet will have a very close pass at Mars. Its nucleus will miss Mars by about 82,000 m...
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>