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Monday, January 30, 2006

Falling Sales Of 50-Seat RJs Drag All RJ Sales In 2005

If there were any doubt, 2004 was the last good year for the 50-seat regional jet.

Last year, the dramatic drop in sales of 50 seaters drove down the total RJ sales for both Bombardier [BBD] and Embraer [ERJ]. While each airframe manufacturer did sell more larger RJs, these sales failed to compensate for the sharply lower sales of Bombardier's CRJ 200 and Embraer's ERJ 145, according to an analysis of regional jet transactions that BACK Aviation Solutions prepared for Regional Aviation News.

The two dominant players in the regional aircraft manufacturing sector split the market in 2005 as each sold 123 airplanes for 48.5 percent market share. Bombardier delivered 47 CRJ 200s and Embraer delivered 44 ERJ 145s.

Only two other firms last year built and delivered RJs. A Chinese affiliate of Embraer, Harbin Embraer, sold three versions of its ERJ 145. The bankrupt AvCraft Aviation delivered four Dornier 328Jets from its German plant.

While both Bombardier and Embraer sold the same number of 50 seaters, the market's falling demand had a greater impact on the Canadian firm.

In 2004, Bombardier delivered 104 CRJ 200s, or 61 percent of its delivered portfolio. As 2005 began, Bombardier predicted a falloff. It estimated it would build 68 in 2005. In the end, 51 orders for the CRJ 200 were cancelled, according to BACK's analysis. Last year, the CRJ 200 comprised 38.5 percent of Bombardier's delivered portfolio.

After delivering 84 ERJ 145s in 2004, Brazil's Embraer had expected to build at least 66 based on its backlog of firm orders as 2005 began. Over the course of 2005, 17 ERJ 145s were cancelled, said BACK analyst Frederick Roe. Embraer reports that it began 2006 with 10 firm orders for its ERJ 145.

Embraer reports that it continues to carry on its books a firm order of 20 ERJ 140s for Midwest Connection, even though that carrier has long since deferred the order. It also has 15 ERJ 135s on its order book for South Africa Airlink.

Embraer delivered 16 of its Legacy 600 business jets last year - up from 10 in 2004. The Legacy 600 is based on the ERJ 135 platform.

Due to airline bankruptcies, there were 37 RJs returned to lenders or leaseholders. The bulk of these returns were in the closing months of 2005 - after Delta Air Lines [DALQ], Northwest Airlines [NWACQ], Mesaba Aviation [MAIR] and Independence Air [FLYIQ] declared Chapter 11. Roe noted that December's returns were not in the database as of press time.

The shift in the market from the 50-seat RJs to the larger regional jets has put fewer seats in the sky.

Bombardier in 2004 delivered aircraft with about 10,030 seats, with the bulk of those seats - 5,200 - on the CRJ 200s. Last year, it delivered aircraft with about 5,640 seats, and again the CRJ 200 put the most seats in the air - 2,350.

Even though Embraer has a larger portfolio of aircraft to deliver in 2005, it delivered fewer seats last year than in 2004. Embraer delivered about 7,385 seats in 2004, with 4,200 seats on its ERJ 145s. Last year, it delivered aircraft with about 3,730 seats, with 1,800 on its ERJ 145s.

Bombardier made the first deliveries in 2005 of its 75-seat CRJ 705, which it sold to Air Canada Jazz. The plane is based on the CRJ 900 platform.

Embraer began deliveries of both its 75-seat Embraer 175 and its 100-seat Embraer 190. Last year was the second year it was selling its 70-seat Embraer 170. Collectively, these larger planes represent 49 percent of Embraer's delivered portfolio.

Embraer expects to deliver 145 aircraft this year from its commercial, business and defense sectors. It has 322 firm orders for its Embraer 170/190 family.

Last year, the German affiliate of the U.S.-based AvCraft Aviation went bankrupt, primarily due to cashflow problems. While it has continued to finish some of the 328Jets on the assembly line, Roe said that 19 orders have been cancelled.

The British owner of Club 328 purchased the AvCraft plant late last year, but it will not finish all the partial planes.

>>Contacts: John Weber and Frederick Roe, BACK Aviation Solutions, (203) 752-2000.<<

Month-By-Month 2005 RJ Deliveries By Manufacturer To Regional Carriers
Manufacturer
Jan.
Feb.
March
April
May
June
July
Aug.
Sept.
Oct.
Nov.
Dec.
Total
Avcraft Aviation


1


1
1
1




4
Bombardier
32
2
12
22
8
10
16
1
8
5
3
4
123
*Embraer
11
9
8
8
11
11
11
10
12
6
8
18
123
Harbin Embraer

1





1
1



3
North American Carriers Aircraft













Air Canada Embraer 175






3
3
3
2
2
1
14
Embraer 190











3
3
American Eagle ERJ 145
3
3
3
3
3
3
2





20
ASA CRJ 200
2
1
2
2

2
1





10
CRJ 700



1
2
1






4
ExpressJet ERJ 145
1
2
2
2
2
2
2
2
1
2
1
2
21
GoJet Airlines CRJ 700





1
2





3
Horizon Airlines CRJ 700


1









1
Jazz CRJ 200
5

2









7
CRJ 705




1
1
6
1
3

3

15
Jetblue Airways Embraer 190








2
1
2
2
7
Mesa Airlines CRJ 900
2
1
2
4

1
2


1


13
Northwest Airlines CRJ 200
3

3
7
4
3
2

2



24
Republic Airlines Embraer 170
3
2

2
3
3
3
1
4
1
2
2
26
Skywest CRJ 700
11

2
7


2

3
3

2
30
US Airways CRJ 700
3











3
Embraer 170
3











3
Other Carriers Aircraft













Air Nostrum CRJ 200
3











3
CRJ 900











1
1
Adria Airways CRJ 200
1











1
Aero-dienst Dornier 328Jet


1









1
Brit Air CRJ 700
1











1
China Eastern ERJ 145







1
1



2
China Southern ERJ 145

1










1
Copa Airlines Embraer 190










1

1
Greek Air Force ERJ 145




1







1
J-Air CRJ 200









1

1
2
Lot Polish Airlines Embraer 170


2
1
1







4
Luxair ERJ 135
1
1










2
Paramount Airways Embraer 170








1



1
Private Wings Dornier 328Jet







1




1
Regional Europeenne ERJ 145

1










1
Satena ERJ 145





1






1
Saudi Arabian Embraer 170











2
2
Styrian Airways CRJ 700





1






1
Sun-Air Dornier 328Jet





1
1





2
Styrian Airways CRJ 700





1






1

*Embraer's total of 123 includes its Legacy 600 based on the ERJ 145 platform; however, due to the lack of space in the table above those buying the Legacy in 2005 were excluded. Bombardier's total of 123 does not include any business aircraft based on its CRJ 200 platform.

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