Analysts have warned that Air Canada's recent decision to split its massive regional jet order between Bombardier and Embraer underlines the need for the Canadian manufacturer to move forward with a decision to build a new 100-seater.

The airline signed memoranda of understanding last month for the acquisition of 90 regional jets under a deal that could exceed $5.4 billion. The agreement includes firm orders for 15 50-seat Bombardier CRJ200s and 30 74-seat CRJ700 Series 705s, worth around $1.3 billion, and 45 Embraer 190LRs worth about $1.35 billion (Flight International, 23 December 2003-5 January).

Options are held for a further 45 CRJs and an equal number of Embraer 190s. Deliveries will begin in the third quarter of 2004. Air Canada says it is still negotiating a deal for another 15 aircraft of unspecified size.

Although Bombardier seriously examined the creation of an all-new 100-seater several years ago - the BRJ-X - to rival the Embraer 170/190 and Fairchild 728/928, it shelved the plan in favour of stretching its existing aircraft. The company recently said it would begin a formal study of entering the 100-seat class market with a view to reaching a firm decision in 12-18 months time.

"If Bombardier wants to compete, they're going to have to build a jet in that size," says analyst Cameron Doerksen at Dlouhy Merchant Group in Montreal. "If they wait too much longer, they're going to miss out on the market entirely."

Air Canada's regional jet evaluation was undertaken jointly with three other Star Alliance airlines - Austrian Airlines, Lufthansa and Scandinavian Airlines - in an effort to conclude a joint deal to satisfy their respective regional jet requirements.

Other aircraft under evaluation were the Airbus A318 and the Boeing 717.

Air Canada will equip its CRJ700s and Embraer 190s with two-class cabins and despite the stated intention of the four Star airlines to acquire a standardised regional jet, Embraer's executive vice-president for civil aircraft Fred Curado believes that only major specifications will actually be complied with.

"Should the 190 be selected by Air Canada's European partners, the different market requirements in Europe will probably lead to a somewhat different passenger cabin arrangement," he says.

Source: Flight International