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Teal Predicts 2,909 Regional Aircraft Worth $65.9 Billion to be Built in 2009-2018

Paris, June 15, 2009 / Teal Group forecasts production of 2,909 regional aircraft worth $65.9 billion between 2009 and 2018. This includes 1,732 regional jets worth $46.9 billion, and 1,177 turboprops worth $19 billion. These numbers are all in 2009 dollars.

"These numbers represent 8% shrinkage relative to the previous ten years (1999-2008), which were basically the glory days for this market," said Richard Aboulafia, Teal Group's Vice President - Analysis.  "Production during that time totaled 3,563 aircraft worth $71.7 billion, comprising  2,791 regional jets worth $61.1 billion, and 772 turboprops worth $10.6 billion." Again, these figures are all in 2009 dollars.

Forecast Highlights

  •  "This market is flat, and there are no likely catalysts for growth," said Aboulafia.  "Regional aircraft were the one segment of the aviation business that did not grow during the great 2003-2008 boom market. In 1989, regional aircraft deliveries were 15% of the total world transport market. In 2008, they were 11%. High aircraft seat mile costs, persistent scope clauses, and problematic relations between major and regional carriers all portend continued market flatness.
  • "The only part of this market that has enjoyed growth is turboprops, a reflection of high fuel prices. While fuel prices have softened, they will likely increase again, meaning continued prosperity for both the ATR and Bombardier Dash8Q families. Both will introduce major new derivatives of their products in our forecast period.
  • "Our numbers also include regional aircraft used in military and corporate applications. Together, these segments represent about 10% of regional aircraft demand by value.
  • "Of the two main players, Embraer has earned an impressive position. It held a single digit percentage of the market for almost 30 years through 1996, but today it holds a 56% share. Bombardier’s share, by contrast, has fallen from 72% of the market by value in 2003 to 31% this year. Assuming the company succeeds in developing its CSeries, the new family will allow Bombardier to play in a different, more vibrant part of the market (although this development would likely have a negative impact on the company's business jet and regional aircraft market standing). Embraer too has decided to focus its efforts elsewhere--business aircraft, and the KC-390 military transport.
  • "Three new market entrants—Mitsubishi (MRJ), Sukhoi/Finmeccanica (Superjet) and COMAC (ARJ21)—want to take advantage of Bombardier and Embraer's de-emphasis of this market, but there's not much of a gap to fill. The SuperJet will find a niche," said Aboulafia, "but there are good reasons to doubt whether the other two planes will achieve more than a marginal presence in the market.

 

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