Low cost & regional: Sales thrust

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The regional aircraft manufacturers are enjoying their best sales period for several years, with turboprops and larger jets proving popular

As the turboprop resurgence continues, manufacturers are beginning to see the emergence of demand for this type of aircraft from low-cost carriers keen to exploit the low fuel costs associated with turboprops.

Recent orders, such as Indian low-cost carrier Air Deccan's 2005 commitment for 30 new ATR 72-500s and the 2006 firm order for 10 Bombardier Q400s plus 10 options from Frontier Airlines, have bolstered confidence among turboprop manufacturers that this market could account for significant future demand for their aircraft.

"Turboprops do not fit in with the classic definition of a low-cost carrier, which traditionally involves operating a large fleet of narrowbodies, but we have seen carriers that offer a low-cost product developing regional networks," says John Moore, senior vice-president commercial at ATR.

He points to Air Deccan as the best example of this, noting that the carrier's mixed fleet of Airbus A320s and turboprops is "an ideal combination to develop smaller regional routes as well as major trunk routes".

According to Captain GR Gopinath, Air Deccan group managing director: "Our model is slightly different." Its strategy to add ATRs to complement its narrowbodies is deliberately targeting smaller destinations. "India has some 400 airports where Airbus or Boeing types cannot land. However, these airports have the potential," he says.

Trung Ngo, vice-president marketing and communications at Bombardier, says the Canadian manufacturer is hopeful that low-fare airlines in India, Latin America and Asia Pacific will adopt the Q400, which he adds is "very suitable" for the low-cost market because of its low seat kilometre costs.

Turboprops are not the only regional aircraft type to attract attention from low-cost carriers Embraer's 170/190 large regional jets have won recent orders from JetBlue Airways and Australian budget carrier Virgin Blue. Total orders for the E-190 leapt from 36 in 2005 to 125 last year (see table). Proof that network carriers are attracted to the E-190 can be found in Lufthansa's recent order for 30 of the type.

Bombardier's CRJ900 also saw a significant increase in net orders in 2006, climbing to 95 from 17 in 2005. Lufthansa's recent regional jet order also included a commitment for 15 CRJ900s. Ngo says that while US majors were undergoing restructuring under Chapter 11 bankruptcy protection, Bombardier was "quite successful" in placing CRJ700s and CRJ900s with new operators in Europe.

With the 50-seat market now in decline, Bombardier is focusing on the larger regional jet market. The manufacturer's 100-seat CRJ1000 has secured 38 firm orders since its launch earlier this year, a "good start" according to Ngo.

Bombardier may develop a stretch version of its Q400 turboprop, and Moore says that while ATR is "not convinced" in the market potential for larger turboprops, the manufacturer will "look at what we can do to adapt" if the demand turns out to be there.