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Monday, May 12, 2008

Large Aircraft Demand up in BBD’s Latest Forecast

Indianapolis, IN – Demand for 20- to 149-seat commercial aircraft is expected to reach approximately 12,900 new aircraft in the next decade and 17,500 in the 20-year period from 2008 to 2027, according to Bombardier's Commercial Aircraft Market Forecast released at the Regional Airline Association meeting in Indianapolis. This represents an increase in demand from last year's forecast. Forecasted demand is valued at approximately $528 billion.
The Bombardier forecast differs from Embraer’s recently released forecast which begins at 30 seats and tops out at 120 seats. Embraer sees a need for nearly 7,500 aircraft in the 30- to 120-seat market through 2027, the vast majority of which would be in the 60- to 120-seat segment. Related Story
The trend towards larger aircraft, coupled with sustained higher fuel prices will reinforce operators' requirement for modern aircraft with low operating costs, said the company, which added the current run up in fuel drove its revised forecast, especially for turboprops which is expected to increase by 400 units for a total of 2,300 aircraft during the period, most of which will be in the larger aircraft. The forecast reflects the shift in demand to larger commercial aircraft with demand expected to reach approximately 6,100 in the 60- to 90-seat segment and another 6,300 in the 100- to 149-seat segment targeted by the company’s proposed CSeries expected to be launched later this year. Currently, there are 5,600 aircraft in service in that segment. Trung Ngo, vice president marketing and communications or the newly launched Bombardier Commercial Aircraft Company, indicated that, with no new offerings in the 100+-seat, single-aisle market, the CSeries will address the pent up demand in the market. Related Story
In the smaller 20- to 59-seat market, Bombardier only expects 500 deliveries during the forecast dropping the fleet to 1,500, including retirements from the current total of 3,500. Ngo indicated that while it has no plans to launch a small turboprop, most small tprops will have to be replaced during the forecast period, so the company is studying the market.
Ngo indicated that 6,300 aircraft will be for new growth and 6,600 to replace aging equipment with the market equally split between the larger aircraft above 100 seats and those below 100 seats. Indeed, 49 percent of the market will go to larger equipment, compared to 57 percent for 60- to 99-seat segment. In terms of deliveries by engine type, 49 percent will be the single-aisle mainline equipment up to 149 seats, compared to 33 percent for regional jets and 18 percent for turboprops.
Ngo indicated that the new CRJ 1000 is on schedule to make its first flight by mid 2008 for entry into service by Q409. The aircraft has 39 orders, compared to 46 for the CRJ 700 and 124 for the CRJ 900. In addition, BAC is still studying the Q400X slated to for 90 seats at this time. Meanwhile, it is working on the Q400 NextGen incorporating the CRJ 700/900 NextGen interior among other changes.

Business Aircraft Market Forecast
The sustained vigor of the European jet market has propelled Bombardier to revise its forecast upward from 2007 levels. Bombardier's 10-year industry delivery forecast increased from 9,950 in 2007 to 13,200 deliveries in 2008. In the 10-year period from 2008 to 2017, Bombardier's Business Aircraft Market Forecast predicts that business aircraft manufacturers will deliver a total of 1,320 business jets annually in all segments from light to corporate airliners, a substantial increase from the industry average of over 620 business jet deliveries annually during the 1998 to 2007 period.
The total forecasted 13,200 deliveries over the 10-year period represent revenues of approximately $300 billion for the industry.
Despite strong concerns over a possible downturn in the U.S. and world economies that could create a decrease in overall orders over the next two years, Bombardier believes industry deliveries should keep increasing until 2017. In addition, based on the important surge in orders over the last few years and manufacturers' solid backlogs, the business aircraft industry is expected to maintain its positive trend in deliveries.
Bombardier's forecast also indicates that primary market drivers continue to be mostly positive. These include manufacturers' current average order backlog that is equivalent to an estimated 29 months of production; a healthy market for pre-owned aircraft; the number of new aircraft programs scheduled to enter service over the next two years; and stable fractional ownership demand.
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