Lufthansa CityLine's decision to sign on the dotted line for $1.6 billion-worth of Fairchild Aerospace 728JET regional airliners undoubtedly represents a major achievement for a (relatively) small US-German aircraft manufacturer with big ambitions. But it does far less to answer the question of how this overcrowded sector of the market is going to rationalise itself.

Fairchild promises to provide regional carriers with their first true 50/90-seat family of jets, which the manufacturer claims they will be demanding in large numbers in the coming years. There is no reason to doubt that the 728JET, as a clean sheet design, should be a highly optimised and efficient performer.

Politics is involved too. Germany has agreed to guarantee loans worth hundreds of millions of dollars to help protect jobs at the former Dornier factory at Oberpfaffenhofen near Munich, although this is not strictly direct aid. Lufthansa, meanwhile, has injected the project with the vital credibility needed to get all those other potential customers on board. The German carrier also (coincidentally?) knows it will need approval to expand its operations at Munich as its main hub at Frankfurt becomes more congested.

But where does this leave the other three main players, who all seem to agree with Fairchild on the size of aircraft the airlines need, but not how to co-operate with each other to satisfy this market profitably? "Everybody is talking to everybody else" is the favourite catchphrase, but little progress is being made.

Franco-Italian consortium ATR had pinned its hopes on a Fairchild tie-up, but appears to have been rebuffed. It will have to turn its attention to Embraer again. The Brazilian company seems to have taken the number two position on the grid, as it speeds up work on its RJ-170 family in an effort to win over Crossair. But Embraer says it needs a partner to launch the aircraft.

Bombardier continues to show airlines its BRJ-X, but is a year or two behind Fairchild and Embraer and has yet to firmly commit itself.

Assuming that Fairchild has the wherewithal to go it alone, it will now hope that its would-be competitors will take as long as possible to make these strategic decisions. Four competitors will be at least two too many.

Source: Flight International