Max Kingsley-Jones/LONDON
when transatlantic ocean liners came under increasing pressure in the late 1950s from airlines with their new jets, shipping company Cunard emphasised its slogan "getting there is half the fun" as it sought to retain custom.
With 1998 seeing another solid sales performance by the regional jets, similar sentiments may well be felt by those few manufacturers who are still trying to sell turboprops to the airlines.
Almost 80% of the 570 regional airliner orders placed last year were for regional jets, which also represented just under half of the 330 deliveries in the regional sector. This is the closest regional jet deliveries have come so far to the turboprops, and next year should see them surpass turboprops for the first time.
In overall terms, the regional market was flat in 1998 with sales at a similar level to that of the previous year. With just four companies still marketing turboprop aircraft, orders for this category of aircraft fell for the third consecutive year, to 125 units.
The growth area of the regional market continues to lie firmly with the jet, and sales were up 30% in 1998, to 440 aircraft, pushing the regional jet backlog beyond 600. This compares to a backlog of just 140 aircraft for the turboprops, which fell 30% more during 1998 and now represents just one-fifth of the total outstanding orders.
Demand from turboprop operators, seeking to move up to small jets, continues to drive demand for the 50-seat jets. Meanwhile, sales of the new 37 and 70-seat jet derivatives (ie the ERJ-135 and CRJ-700) are now getting into their stride, the latter category representing the upper edge of many US pilot scope clauses as agreed.
As the manufacturers try to satisfy the changing tastes of their customers, there has been a stampede towards the development of small jets, resulting in a crowded, top-heavy situation. Fairchild Aerospace started the ball rolling last May with the launch of a new of 60/100-seat regional jet programme, the Fairchild Dornier 728JET family, which should begin flight testing next year. Fairchild has since been joined by ATR's revived Airjet (although ATR is deeply involved in talks about joining the Fairchild project), Bombardier's 80/ 100-seat BRJ-X and the increasingly unlikely proposed resurrection of the Fokker 70/100. Embraer is also surveying the market, while British Aerospace is planning an updated Avro RJ. Boeing and Airbus are infiltrating the regional market with their100-seat 717 and A318. margins in the regional sector are traditionally wafer-thin and the fragile market has already seen the exodus of several manufacturers recently, including Fokker, Saab and BAe's turboprop arm Jetstream. The market will not sustain the large number of players now competing to produce jets, and consolidation is likely this year.
The sales success enjoyed by the turboprop manufacturers since the mid-1980s, with deliveries of 30/60 seaters averaging around 200 a year, came at the price of long-term financial recourse, through manufacturer-guaranteed financing or leasing. In recent years, these mounting liabilities were brought into sharp focus, as the manufacturers faced the prospect of their products' residual values diminishing below guaranteed levels.
BAe was the first to take a hands-on approach to its portfolio control, with the setting up of a dedicated asset management division. This strategy has been followed by other manufacturers, most recently Saab and ATR. The companies are now more focused on ensuring the long-term viability of their turboprops, which, although relatively young in technology terms, are facing an early obsolescence as many premier operators switch to jets.
Last year saw the AI(R) partners BAe and ATR go their separate ways after failing to agree a long-term strategy. ATR is now the only major turboprop manufacturer yet to formulate firm plans for a jet product line.
The Franco-Italian consortium remains bullish about its market. Last year, ATR's then president Patrick Gavin said that sustained production of 40 ATRs a year "...is reasonable", while Antoine Bouissou, president of the US arm, expressed his confidence that a revival in turboprop sales was around the corner.
Saab will this year cease regional aircraft manufacturing and has already geared up its leasing division, to ensure that its products have good long-term prospects on the secondhand market.
Source: Flight International
