FOR IMMEDIATE RELEASE
Forecast International: Realignment and Restructuring Characterize Regional Aircraft Market
NEWTOWN, Conn. [October 26, 2018] – Using data from its innovative Platinum Forecast System 4.0, Forecast International projects that 6,086 regional aircraft will be produced in the 15-year period from 2018 through 2032. This total includes regional jets and regional turboprop airliners. The value of this production is estimated at $227 billion in constant 2018 U.S. dollars.
The Forecast International projections call for annual production to increase from 293 aircraft in 2018 to 466 aircraft in 2030, with only a brief dip in 2021 interrupting the steady rise. For the long-term, yearly output is expected to retrench somewhat in 2031 and 2032 but still remain above 435 units each year.
"The regional aircraft market is being transformed at both the manufacturing level and the operator level," said Forecast International senior aerospace analyst Raymond Jaworowski. "This transformation is profound, and will have an impact on the market for years to come."
At the manufacturing level, large airliner manufacturers Airbus and Boeing have each been making moves to establish a presence in the 100-130 passenger segment of the regional aircraft market. Airbus has acquired majority ownership in CSALP, the entity set up by Bombardier to oversee production of the aircraft family once known as the CSeries and now known as the A220. Bombardier has retained a stake in CSALP.
Meanwhile, Boeing has signed a Memorandum of Understanding with Embraer regarding formation of a joint venture, under Boeing operational control, that would absorb Embraer's commercial aircraft business. Expected to close in 2019, the deal would bring Embraer's E2 family of large regional jets under the Boeing product umbrella.
The participation of Airbus and Boeing will provide these regional aircraft programs with access to the companies' extensive sales and support networks, engineering resources, supply chains, production capacities, and long-standing relationships with customers and suppliers. Jaworowski noted, "Negotiations with suppliers could take on a different power dynamic with Airbus or Boeing at the table, potentially leading to cost reductions and new operating efficiencies."
The operator side of the market is also changing. A very mature regional airline sector in North America is currently generating only limited opportunities for growth, but the regional sectors in Europe and especially Asia are showing considerable dynamism.
Regional carriers in North America are hampered by such obstacles as major airline consolidation (resulting in less feeder work), a severe pilot shortage, and scope clause restrictions on aircraft size and weight. Said Jaworowski, "Liberalization of scope clauses would unlock significant demand for large-capacity regional jetliners in the U.S. market."
Prospects are brighter in Asia and Europe. Asia is quite promising as a future growth market for regional airlines, with China especially having tremendous long-term market potential. Demand in the Chinese market will be filled by aircraft from China's own indigenous manufacturers such as AVIC and COMAC, as well as by aircraft from manufacturers outside China.
The Forecast International data project that Embraer, ATR, Mitsubishi, and Bombardier will lead the regional aircraft market in terms of unit production during the 2018-2032 period. Embraer is forecast to build 1,519 regional jets, for a market share of 25 percent. Following thereafter, ATR will build 1,207 regional turboprops, representing a 19.8 percent share of the market, while Mitsubishi will produce 742 regional jets, for a 12.2 percent share. Bombardier, which produces both jets and turboprops, is expected to produce 503 regional aircraft, for an 8.3 percent market share. AVIC is projected to build 377 regional aircraft, a 6.2 percent share of the market. The CSALP joint venture is calculated separately, and is projected to account for production of 296 A220-100s, representing a 4.9 percent share of the market.
The Platinum Forecast System 4.0 is a breakthrough in forecasting technology that enables customized market assessments to be created based on proprietary Forecast International production forecasts and data. With use of the Platinum system, clients can quickly identify both market risk and future opportunities. System types and platforms, national currencies, geographic regions, and more can all be input into the system as criteria in order to create distinct market segments for evaluation. Market trends and shares are displayed graphically, and all data are complemented by full market reports, Forecast Rationales, Excel spreadsheets, and more.
About Forecast International
Forecast International, Inc. is a leading provider of Market Intelligence and Consulting in the areas of aerospace, defense, power systems and military electronics. Based in Newtown, Conn., USA, the company specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide. Forecast International also maintains a high posture of situational awareness and geopolitical analysis.
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