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.