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Regional Aviation
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Regional Jet Demand Won’t Return Until 2012
April 29, 2003
The order backlog for regional jets has shrunk and demand won’t surge again until around 2012, Les Weil, chief analyst of Airclaims, told the Commercial Aviation U.S. Regional Airline Conference yesterday. But he also predicted that “major orders will be placed in the next 12 months,” and that during the next 10 years airlines will see more growth in the segment served by 50-seat RJs because the economic downturn “has pushed demand slightly to the right.” He also predicted growth in the 70-seat and above market during the next decade, while the market for 35 seat aircraft will dry up, noting “they will be [like] 19-seaters in a few years.” Weil pointed to order backlogs on some of the larger jets as proof of a soft market, with Embraer having a backlog of 88 for the 170 and 195 RJ Bombardier a backlog of 21 for its CRJ 700 and 900 aircraft.
Weil said he did not see demand for the larger 100- to 110-seat regional jets in the next few years, noting, “Embraer will have to be patient. There are no major orders” because the aircraft is too big, given market conditions. Weil said the “traditional [airline] model is broken” and the law of supply and demand has given way to “the law of the jungle,” with cut-throat competition in which majors are feeling the pressure from low-cost carriers. Tulinda Larsen of BACK Aviation Solutions predicted that eventually majors will shrink their core model similar to US Airways, using regional jets for its domestic hub connecting routes and relying on larger aircraft for international and long-haul routes only. She said the majors “will abandon the low-fare passenger to low-cost carriers.” Passengers will find the system less convenient, but Larsen said there is little choice but to depend more on RJs if majors are to survive. -DM
Source: Aviation Daily, April 29, 2003
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