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Aviation History
1997
1997 - 0563.PDF
NEWS ANALYSIS KEVIN O'TOOLE'/LONDON TIME WAS WHEN the regional-aircraft industry-was focused on who would win the battle to build a fam ily of 70- to 120-seat jet-powered aircraft. Strategists toiled to de monstrate how such a family would sit beneath the fleets of the majors. Much has changed since then. Now, die focus has clearly shift ed down to the 50- to 70-seat regional jet, and possibly even fur ther to 30 seats, raising the equally tricky strategic question of where that leaves the range of turboprops which now occupy die niche. The debate has been bubbling under for a while, but has heated up over the last year for at least a cou ple of good reasons. It has been helped in part by the overdue bout of industrial restructuring which has begun to give a little more order to what has been a woefully fragmented market. The year began with the official launch of the Aero International (Regional) venture, bringing to gether British Aerospace and ATR partners Alenia and Aerospatiale. A couple of months later, Daimler- Benz Aerospace (DASA) began its retreat from an over-ambitious expansion with the ending of sup port for Fokker and die subsequent sale of Dornier to Fairchild. As a result, the battle between Fokker and BAe Avro centring on the 100-seat regional-jet market has faded, to be replaced with a broader contest between the grow ing AI(R) and Bombardier groups. Perhaps more importantly, the success of the 50-seat regional jet has become difficult to ignore. Since its debut at die end of 1992, Bombardier has clocked up close to 200 sales for its 50-seat Canadair Regional Jet (CRJ). In 1996, the performance visibly stepped up a gear, widi Bombardier taking in 60 new aircraft orders and 73 options. The outlook for 1997 is looking as strong, with another 37 aircraft ordered in the opening months. Embraer has followed suit with another 60 orders over die year for its EMB-145, deliveries of which began towards the end of the year. The Brazilian manufacturer is optimistic that it can convert more of the 200 options and letters of intent which it still holds from the In search of the new jet age Where does the turboprop now fit in a market being redefined around the new breed of regional jet? early days of the programme. On a rough calculation, that means that the orders for the 50- seat regional jet were three times the number received by the six tur boprop types still in die 40- to 70- seat market. The regional-jet sales had already nudged ahead in 1995, but, in 1996, tliere was a landslide. The rush is on to launch more. Bombardier has already intro duced the 70-seat CRJ Series 700, with three firm orders from Brit'Air and says that it has anodier 28 "conditional" orders in hand. AI(R) is working up a case for launching a 58-seat and 70-seat AIR JET family, widi die hope of a launch some time around mid year, provided diat it can convince the joint-venture partners dvat they can make money on the S1 -1.2 bil lion project. Embraer is still toying widi die possibility of new versions above or below the EMB-145. Fairchild Dornier's progress towards putting turbofans on the 328 could could stir up die debate still further, taking the fight down to the 30-seat sector. Engines have been selected and a first flight is Next stop the 30-seat regional jet? being targeted for the start of 1998. All of which begs the question of where the turboprop goes from here — a topic of more than acade mic interest to Bombardier and AI(R), given dieircontinuingcom- mitment to the Dash 8 and ATR ranges. Perhaps, unsurprisingly, their strategic forecasts suggest that there will be room for both. Experience from the first tour years of CRJ operations gives some comfort. Bombardier's analysis suggests that around only 11% have been used as direct turboprop replacements, with another 17% to "supplement" existing turbo prop operations. The largest por tion has been used on new routes and to replace or supplement the existing jet-aircraft services, widi a type more suited to the economics of regional operations. AI(R)'s analysis is even more optimistic, suggesting that only 20% of the new regional jets have strayed directly on to turboprop territory. The manufacturers are also at pains to point out die difference in route length which exists between the types. Around half of turbo- props are operated on routes of 3 70km (2 OOnm), about the average length for a regional airline, and perhapsonly20% stray upwards of 550km. The regional jets have averaged sector lengths of 710km. AI(R) adds that issues of eco nomics should help to keep the dif ference alive in the minds of airline customers. Chief executive Patrick Gavin argues that today's 50-seat jets tend to operate on longer, higher-yield, routes with little competition, but that is likely to change as new entrants begin to mount a challenge. That will put the focus on costs and frequencies. He adds that the issue of fuel costs, which was hardly raised a year ago, has also become more critical following the 30% hike in oil prices. A rise of 10c per gallon of fuel would cost a 50-seat regional jet an extra $55,000 a year more than an ATR 42-500, he reckons. New sales of larger turboprops are expected anyway to centre increasingly on developing air markets, such as Asia, which pro vides healthy growth rates and die prospect of young carriers which would naturally look to turboprops as their first step up in seat size. Based on such factors, the man ufacturers' long-term forecasts are reasonably upbeat on the future of die turboprop. The consensus • •asms Group/type AI(R)/AVR0 Seats Deliveries RJ 70-120 Bombardier CRJ Embraer EMB-145 Fokker Fokker 70 Fokker 100 Total TOTAL 50 50 79 100 26 52 4 13 4 17 99 mm Orders 21 60 63 6 0 6 150 1996 Cancelled Net orders 9 2 18 na na na 29 12 58 45 na na na 115 Backlog 32 49 59 4 0 4 144 Deliveries 21 41 0 26 15 41 103 Orders 50 38 5 31 16 47 140 NOTES: CRJ orders and deliveries exclude aircraft for business aviation applications - backlog estimated. Fokker include only those cash deals agreed by the bankruptcy administrators. 1995 Cancelled Net orders 13 0 0 0 0 0 13 37 38 5 31 16 47 127 Backlog 46 43 18 44 16 60 167 backlog and order figures for 1996 FLIGHT INTERNATIONAL 5 - 11 March 1997 25
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