AirInsight Report Summarizes Planned Aircraft Programs

In its just-released report "The Coming Aerospace Squeeze - a Review of Commercial Aircraft Programs in Brazil, Canada, China, Japan and Russia," AirInsight summarizes current and planned aircraft programs in each of these countries and the potential impact of those programs on the commercial aerospace market.

Authored by noted analysts Ernest S. Arvai, Scott Hamilton and Addison Schonland, 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 57-page 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 replacement 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, Inc., 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 turbofan 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.

The report examines a number of new programs in detail, including the E-Jets and future developments from Embraer, the CRJ-1000 and CSeries from Bombardier, the ARJ-21 and C919 from China, Mitsubishi MRJ and Kawasaki YPX from Japan and the Sukhoi Superjet 100 and UAC MS-21 from Russia.

FMI: www.iag-inc.com/airinsight/