Not every company can say that product demand is one of its biggest challenges, but the development of regional aviation has contributed to large overtime bills for regional jet manufacturers as they workaround the clock to meet the needs of fledgling markets.
Back to basics
Regional jet manufacturers such as Bombardier are increasingly looking to expand the capacity and the size of aircraft to meet new customer demands.
"The game in the regional jet market is really in the 70- to 90-seat market," says Trung Ngo, head of marketing and sales at Bombardier.
Bombardier has faced some difficult times in this market. The CRJ700 and CRJ900 have not captured the market as anticipated. Sales for the CRJ900 have averaged about 13 aircraft a year since the programme's launch in 2001 and sold a total of about 62 units in that period.
Ngo says that the market is yet to realize the operational benefits and large cost savings that this aircraft offers. "The million-dollar question is when will customers buy them," says Ngo.
The CRJ900 programme has added five customers in the past 18 months.
Bombardier is still trying to emulate the kind of success that it experienced with the CRJ200. Although the 50-seat regional jet seems to have all but waned, Bombardier is investing heavily in the CRJ platform, now its bread and butter.
The manufacturer has faced difficulty in the US and Europe with a lot of uptake from European carriers.
US airlines are still emerging from bankruptcy and are, therefore,reluctant to acquire new aircraft. However, the trend has been for these carriers to buy regional jets because of the efficiency they offer and the low labour costs associated with them.
"Having a regional aircraft is the ultimate in outsourcing becausethese aircraft really lower total labour costs and burn less fuel," says Ngo.
He says that, despite the efficiency gains, startup carriers are unlikely to acquire these aircraft during their development phase. Start-ups are likely to buy larger 180-seat aircraft such as the A320 orthe 737-700/-800.
These aircraft enable the start-ups to capture a greater portion of the market and to fly into busy hubs.
"Some of the airlines they take are 180-seat aircraft, which meansthat you need a lot of people to fill those planes. The CRJs are half the capacity of an A320 or a 737," says Ngo.
Bombardier continues to have a commanding position in the regionaljet market.
It has 53% market share in the 20- to 99-seat market and a 37% share of the market for 100-seat aircraft.
It has also solidified its position, for now, as the market leader, with 60% of all new aircraft orders in the 20- to 99-seat market going its way.
The manufacturer will soon launch the CRJ900X and the Q400X, derivatives of the CRJ900 and Q400. The CRJ900X will have a seating capacity for 98 passengers, compared with the CRJ900 that seats 86.
The regional jet market is expected to shift again to the higher 100- to 149-seat market.
Bombardier has pegged its future on the growth of this market with53% of sales expected to come from this segment. A push into this market may see it compete aggressively with the A320 family and the 737. Bombardier expects to earn revenue of $370 billion from the sale ofnew aircraft between 2006 and 2025.
Whether Bombardier can compete with Airbus or Boeing is one factor. However, what is certain is that greater competition will benefit customers and passengers.
As Ngo says, hard work is needed to maintain the position of the world's third-largest manufacturer because the competition is lurking close behind.
Meeting market needs
Regional aircraft manufacturer ATR has enjoyed new success in developing markets such as those in the Middle East. It is delivering aircraft to Pakistan Airlines and has become a major name in the region.
While ATR is present throughout the world, it pays close attentionto the rapid demand for air travel in countries such as China and India.
Bombardier Aerospace offers 24/7 technical support for operators of Bombardier Learjet, Challenger, and Global aircraft. For Learjet technical support: (316) 946-6100 or email@example.com...
SAO JOSE DOS CAMPOS, Brazil , July 7 /PRNewswire-FirstCall/ -- Embraer (NYSE: ERJ; Bovespa: EMBR3) delivered 56 aircraft to the Commercial, Executive, and Defense segments during the second...