Industry developments have conspired to depress the 50-seat jet market to its weakest position since the late 1990s. Backlogs have shrunk to their lowest levels in years, and the latest deal struck by Independence Air to return another 24 CRJs to their lessors hasn’t helped matters.
Riding the wave created by the success of its 50-seat regional jet program (now on the wane as the regional airlines evolve toward larger aircraft), Brazilian aircraft manufacturer Embraer has set its sights on becoming a major player in the business aviation market to bolster its move into building larger regional airliners (the 170 and 190 lines).
Having dropped regional operations rather than continue losing money into the winter season, Netherlands-based Denim Air group plans to offer enhanced wet-lease services and may add regional jets, according to airline CEO Matthijs Boertien. Poor profitability and increased competition in key German, Italian and Swiss markets saw subsidiary Denim Airways cease scheduled flights in September.
Twilight has fallen unceremoniously on the heyday of the 50-seat regional jet, and Bombardier’s October 28 announcement that it would suspend production of the CRJ200 only underscored that fact. Of course, the recent bankruptcies of Northwest Airlines, Delta Air Lines and Independence Air haven’t helped, but signs of a meltdown came long before any CRJ operators stopped deliveries or started grounding airplanes.
An insolvency administrator has signed a letter of intent with Germany’s RUAG Aerospace Services to take over from bankrupt AvCraft the Dornier 328 type certificate and product support. While production of the Do-328 regional jet and the Envoy executive version ceased several months ago, 140 employees remain at AvCraft, also in Germany, to provide customer support and aircraft maintenance.
The growing Russian market for business aircraft prompted western manufacturers to expand their presence at the MAKS airshow, held recently at Ramenskoye Aerodrome near Moscow.
It seems hard to reconcile the rather dark and anxious tone of this year’s Regional Airline Association convention with double-digit margins and record revenues. Listening to airline delegates speak at this year’s get-together, one got the distinct impression they knew something the rest of us didn’t. In fact, regional airlines have been waiting for the day the gravy train of guaranteed RJ profits derailed.
Rising load factors for the 30- to 120-seat segment are evidence that carriers are becoming more efficient. But with revenues improving only “mildly” and labor costs continuing to inhibit growth, operators continue to look for ways to trim the cost of doing business and to combat the rising price of fuel. That’s the view of Brazilian aircraft manufacturer Embraer as it takes a long-range look at its segment of the airline industry.
Canadian manufacturer Bombardier has the considerable task of supporting some 5,200 aircraft of many types, from vintage Series 20 Learjets to the latest Global Expresses, plus regional airliners and amphibian bombers. This involves more than 120,000 different spare parts that must be shipped on short notice to service centers around the world.
Slower-than-anticipated growth of regional air transport markets in Asia has apparently reached the consciousness of market prognosticators at Embraer, whose latest 20-year forecast for deliveries of small commercial jets reflects a less optimistic outlook for both China and the rest of the Asia-Pacific region.