The withdrawal of first British Aerospace and then Saab from regional-turboprop manufacture does not signal the collapse of the sub-40-seater market so much as confirm that this market is changing rapidly into one for small jet airliners. It is also a market in which, no matter how buoyant the passenger traffic, there are already too many aircraft marketeers touting for trade.
It is less than ten years since Bombardier was getting heavily sceptical reactions to its decision to launch the Canadair Regional Jet (CRJ), and less than five since Embraer's EMB-145 jet project was regarded as a white elephant which could justifiably crush the struggling Brazilian company. Even more recently, scepticism surrounded the potential of the 30-seat regional jet market being pioneered by Fairchild Dornier with the 328JET.
Reactions today could hardly be more different. The CRJ is well-established with mainstream operators; the EMB-145 is entering service in large numbers; the 328JET is only two months away from its first flight. More importantly, some of the biggest committed regional-turboprop users in the world's most competitive regional market (the USA) have signalled quite clearly that their future lies with these small jets, not with turboprops. One thing can be certain: where American Eagle and Continental Express go tomorrow (and that is towards orders for 250 regional jets between them), their competitors will follow the day after. That is good news for those in the running for those big orders (in this case, it seems, Embraer and Fairchild-Dornier), but not such good news for the industry if it misleads too many others into thinking that there is a pot of gold here waiting to be snatched.
The big regional operators have shown themselves to be ruthlessly professional in the ways they do business - and nowhere more clearly so than in how they select and acquire their aircraft. They look for the best alternative in cost and technical terms in each size range and, while there may be good commercial and operating arguments to stay with a single supplier, if that supplier does not provide the appropriate products and prices, the carriers are quite prepared to select from different stables.Thus American Eagle split its first order for regional jets between Embraer for the 50-seaters and Bombardier for the 70-seaters on the grounds of pricing and availability. That should provide warning aplenty for those thinking of entering this market.
Each player will have to develop, not just a single aircraft, but a whole range of, perhaps, 30/40/50/ 60- and 70-seaters to justify the cost of the development in the first place. Nobody is going to make a killing by developing just a 30-seater, or just a 70-seater.
With the operators seemingly having got used to placing less emphasis on fleet commonality (which is so often unavailable)than on niche optimisation, a new entrant could anyway end up developing a complete range, but still picking up just isolated orders. To make matters worse for the new entrant, there is at least one incumbent, which has already marked out its turf in each of the key size categories. Even if a new entrant were able to press the launch button tomorrow, he would find himself at least two years behind the established competition.
That said, there has never been a market which belonged in perpetuity to a single manufacturer by divine right. Even Boeing, which came close to achieving that status with its 747, now finds the market which it created being successfully attacked from below and (almost certainly) from above by Airbus. So, just because the likes of Bombardier and Embraer have created the small-jet market, there is no guarantee that they will dominate it forever.
Equally, however, any new entrant - be it an established regional aircraft player or not - must face the fact that it will have to recoup its investment in multiple variants of a totally new airframe by selling against established competitors, at least one of which can, in almost every sub-sector of that market, counter that new-launch with a cheaper-to-develop derivative.
In any sector of the airliner market, three is definitely a crowd: in the cut-throat regional sector, it is already an unwieldy multitude - and one which will find it difficult to pay its way.
Source: Flight International
