This year’s biennial exposition at Farnborough has yielded little news on the regional airline side, but the launch of the 110- to 149-seat Bombardier CSeries provided a lot of speculation as to the 100- to 150-seat market. (See separate story on the launch in this issue.)
Farnborough can be seen as nothing but a success for the Sukhoi SuperJet with SuperJet International logging 49 aircraft worth over $1 billion, adding them to its 73-aircraft order book. Most of the new orders are to Western customers. (See separate story in this issue) As for the Mitsubishi MRJ, there was absolutely no news at Farnborough, surprisingly, given the company made a launch decision early this spring. The last we heard from the Mitsubishi Aircraft Company was when it announced a deal with Saab Aerotech covering at least component support for Mitsubishi’s MRJ aircraft in May.
Farnborough’s announcements seem more reflective of the fact that both Bombardier and Embraer are putting a major emphasis on the low end of the narrow-body market, which is, not really news, since both have been touting their aircraft as a solution to the mainline fuel problem for some time. Clouding the prospects of Bombardier and Embraer are the engine developments announced at Farnborough and the fact that the next generation narrow bodies set to replace MD-80s, DC 9s and 737-300 and 500s could come as early as 2017. (See separate story on engine developments.) However, it remains to be seen just how soon mainline airlines will opt for replacement aircraft, which Embraer says will only be eight percent of EJet deployment in the North America, compared to seven percent in Europe and six percent for the rest of the world.
The Boeing 2008 outlook calls for a market of 29,400 new commercial airplanes (passenger and freighter) by 2027, with replacement aircraft taking a greater share of demand (43 percent) than previously forecast (36 percent). All sectors of the market except that for regional jets will require more aircraft than it expected a year ago, according to the company’s outlook.
The industry had expected the next generation narrow-bodies to miss the requirements of airlines, coming in 2020, leaving the field open to Embraer, Bombardier and newcomers such as the Mitsubishi MRJ and Sukhoi Superjet. However, Embraer has consistently said that it does not envy Bombardier’s position, adding the 100- to 150-seat market will be very competitive. Acknowledging that the A319/737-700 market was large, Embraer assumes that Boeing and Airbus will make a move in that segment.
Boeing is following the market closely and could launch a quick response if necessary. However, it said that airlines are moving away from 90 seats. Boeing has not ruled out continuing to offer aircraft in the smallest (100-seat) sector. While that leaves the 100- to 149-seat open to question but one wonders who exactly is moving away from 90 seats. Certainly, not the regionals. Perhaps Boeing is thinking about the smallest DC 9s, if so, Boeing is right but it seems to be unaware of what is happening at the regional level. Still, it predicts operators of aircraft below 100 seats will upgauge.
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. Embrear Executive Vice President Commercial Aviation Mauro Kern sees an urgent need for replacement of 650 jets in the 30- to 120-seat class, most of which are more than 25 years old. The hottest market sector is with low-cost carriers with 128 start ups worldwide since January 2006.
Meanwhile, Trung Ngo, vice president marketing and communications of 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 which is becoming more acute with every jump in oil. 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.
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 51 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.
For now, U.S. carriers are broke, while worldwide, carriers are clamoring for new narrow bodies. Aviation Today Publisher and Blogger John Persinos and Aircraft Value News Editor Paul Leighton noted the unwarranted emphasis put on the state of the U.S. industry at a time when other regions are booming, aptly illustrated by major orders from the Middle East and China. Leighton, who runs RAN's sister publication, indicated aircraft being delivered are once again being used as replacement rather than growth capacity and there is a definite emphasis on larger equipment – well above 150 seats – as a means of reducing unit costs.
Embraer expects 53 percent of ERJ deployments will go to right-sizing aircraft to market in the rest of the world, while right-sizing deployments in North America will constitute 51 percent of deliveries and, in Europe, 42 percent.
“Yes, there is a demand for fuel-efficient equipment, but airlines need to be able to afford to buy/lease such aircraft and with greater losses comes the prospect of lesser ability to buy new aircraft,” Leighton told Persinos. “Certainly, if oil prices remain at current levels aircraft built before 1995 will be under severe threat from replacement/retirement.”

50 Seaters at Risk
Again, the fact that 50-seaters are at risk is not really news, although Leighton indicated value of used aircraft is dropping rapidly. “These aircraft are continuing to experience considerable difficulty in the face of even higher fuel prices,” he said, adding he expects more availability shortly pressuring prices further at a time when larger aircraft prices are stable. However, Embraer, who indicated U.S. airlines bought far too many RJs to meet market demand owing to scope clauses, expects a ready market for 50-seat RJs outside the U.S. Related Story The company pointed to a need to replace 458 aircraft just in the CIS and also noted that there will be no larger wholesale abandonment of 50 seaters all at once.
In the smaller 20- to 59-seat market, Bombardier only expects 500 deliveries in the next 20 years, 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. Embrear is also studying the turboprop market.

Trading Green for Green
Just as last year at the Paris Air Show, when going green was the over-riding theme of the show, this year the theme is coupled with fuel efficiency. Persinos even stumbled on a 75-gallon tank of algae – the most promising source of bio fuels – at the Boeing display. Algae doubles in size every 24 hours.
“Concerns about climate change and the emissions trading issue caused quite a ruckus at Farnborough,” said Leighton. “The European Parliament voted last week to mandate emissions permits beginning in 2012 for all flights that land or take off in the European Union zone, regardless of the airline’s nation of origin or the degree to which the flight occurs in European airspace.”
To say the least, this decision was not popular with aviation honchos in attendance at Farnborough, said Persinos. At an industry forum, International Air Transport Association (IATA) Director General Giovanni Bisignani dismissed the plan as ‘greed’ on the part of the EU. Meanwhile, in remarks to the press, Airbus president Tom Enders branded the EU’s policy ‘a scandal’.”
Bisignani said the industry came late to stressing its environmental credentials. Yes, but it was probably because it was too busy actually gaining fuel efficiency and reducing carbon emissions to think about launching a PR campaign. While it left itself open for environmental and governmental attacks including new taxes, inclusion of aviation amongst significant polluters seems to indicate environmentalists and governments are less interested in actual performance than they are in fundraising.
“Airlines already are – and long have been – motivated by the high cost of fuel to operate as fuel efficiently as possible, which is the best means of reducing greenhouse gas (GHG) emissions,” said Air Transport Association. “In fact, U.S. airlines have improved their fuel efficiency by 110 percent since 1978, resulting in 2.5 billion metric tons of carbon dioxide savings – roughly equivalent to taking 18.7 million cars off the road each of those years.” ATA airlines have committed to an additional 30 percent fuel efficiency improvement between 2005 and 2025, said the organization, adding modernization would add another 10 to 15 percent improvement on top of that.
Those governments would do better to focus on modernizing their own traffic management systems than on layering on more costs which only serves to divert funds from acquiring even more fuel efficient equipment and development more environmentally friendly practices such as engine washing that is saving so much in fuel consumption. Governments and environmentalists could also go after the real problems – the power industries – which contribute more than a third of carbon emissions.
The Air Transport Association reiterating the EU policy was illegal under the Chicago Convention. “If this sounds like a tax grab, it is. Europe rakes in the revenue – the rest of the world pays,” said ATA President James May said.
For its part, Bombardier seeded the entire show site with recycling bins, proclaiming, said Persinos in his blog, “A new planet, a new plane,” alluding to its new C-series jet, which the company claims consumes up to 20 percent less fuel than competing aircraft models.
“To be sure, some of this breast-beating about environmentalism is just corporate propaganda, but a lot of it is genuine,” said Persinos. “After all, companies have an incentive to promote fuel efficiency, because burning less fuel saves another type of green: money.”