It remains a paradox of the aerospace industry that while just two manufacturers are competing head to head for the $1,400 billion worth business for large airliners over the next 20 years (ie with more than 90 seats), twice that number are battling in the regional market which is expected to account for just $85 billion.
It should come as no surprise then that as the heat intensifies in this highly competitive market, one of the players has been burnt. It was the regional jet sector's most recent arrival Fairchild Dornier that blinked first, making the highly unusual decision to cancel an airliner programme that had begun accumulating orders and was well into its development cycle.
According to Fairchild chief executive Chuck Pieper, continuing relaxation of US scope clause restrictions brought the 44-seater into the orbit of 50-seaters produced by big ticket regional rivals Bombardier and Embraer, thereby undermining the business case for the derivative. More significantly, the established rivals have moved quickly to destabilise the new threat with smaller, or cheaper alternatives of their own.
While no-one can deny the growth opportunities that the market for sub-100 seat jets offers - Boeing estimates some 4,200 aircraft will be delivered over the next 20 years, representing almost a fifth of all new aircraft produced - there are still important questions to be answered.
It is unclear to what extent the US pilots' unions will allow regional airline fleets to grow as scope clauses are renegotiated. What is clear is that those negotiations will have a major impact, one way or the other, on the size of the market.
With a shake-out among the regional jet players inevitably looming, the question mark remains over which of these will be the winners and which companies the losers? The correct matching of price versus manufacturing cost is more crucial in the regional sector, with its traditionally wafer thin margins, than in any other sector of the business.
Only the foolhardy will forget that it takes more than just a good product to succeed - the demise of the once mighty Fokker in 1996 bears witness to this.
See Headline: Fairchild Dornier drops 428JET
Source: Flight International
