Forecast International Says There's Light Ahead

In a new study entitled "The World Market for Regional/Commuter Transport Aircraft," Forecast International predicts that 4,112 regional aircraft, worth some $88.2 billion, will be produced in the 10-year period spanning 2003 through 2012. The total includes 3,331 regional jets and 781 turboprop aircraft.

The study notes that production of regional aircraft production declined in 2002, for the first time in three years. Forecast International expects a further drop once final data are available for 2003. However, the company anticipates a turnaround in 2004, and projects that annual production will increase in both 2004 and 2005. Some drop-off is then expected in the following three to four years, with growth again resuming by 2010.

"Many major carriers have been consolidating their route structures since the present industry downturn began in 2001, and regional airlines have been stepping into the void created by these moves," said Forecast International senior aerospace analyst Raymond Jaworowski.

Majors' Loss = Regionals' Gain

During the past couple of years, many majors have been placing aircraft into storage, reducing numbers of flights, and abandoning some routes altogether. Consequently, regional airlines have picked up several routes that have been discarded by majors.

Production of regional aircraft will be buoyed by the growth of regional airlines, including the expansion of small carriers into underserved markets. These carriers will provide a customer base for sales of 19-30 passenger turboprop aircraft. Overall, however, turboprops are expected to lose ground over the next 10 years in the sales battle with regional jets.

According to the study, the market for 70-120-passenger regional aircraft is expected to be dynamic during the 10-year forecast period, as traffic growth causes regional airlines to buy 70-120 seaters to replace smaller capacity transports. As passenger traffic grows, airlines operating 50-passenger aircraft on many routes may find that they do not have sufficient capacity to meet demand and will need larger capacity aircraft to compete.

Who's likely to come out on top?

In terms of unit production, Embraer is expected to be the leader in the regional aircraft market during the 2003-2012 period with a share of about 37 percent, on production of 1,531 aircraft.  Bombardier is expected to be second with a 34 percent share, on forecast production of 1,398 regional aircraft.

When the market is measured in value of production in US dollars, Bombardier takes the top spot, with the value of its 10-year production expected to total $36.5 billion for a 41.3 percent share of the market.  Embraer is second with an estimated $32.8 billion and a share of just over 37 percent. 

FMI: www.forecast1.com