Bombardier's CRJ – Rumors of its Demise are Greatly Exaggerated

  • ID: 4393795
  • Report
  • Region: Global
  • 59 Pages
  • AirInsight
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This research concludes that the Bombardier CRJ program, considering the various equipment advances and technology improvements, remains an effective and credible regional jet option. The CRJ will certainly be effective through 2019, and if US scope clause size limits do not ease, will be effective through 2024. Rumors of its premature demise are therefore overstated. 

The CRJ is the best-selling regional jet in history, and continues to have market success. While the CRJ has been in service since 1991, newer models and continuous improvement enable the aircraft to retain industry-leading economics, particularly for aircraft that meet US scope clauses.

The CRJ remains an effective competitor in the US market because of scope clause restrictions on aircraft capacity and weight, and internationally because the CRJ-1000, too large for US markets, has competitive trip costs for short-haul routes. While the Embraer E-175 has gained market share in recent years, the CRJ remains a popular regional aircraft, particularly in the US market.

Since the US represents about 70% of the global regional jet market, it exerts tremendous influence on regional jet OEMs, with US scope clause restrictions impacting aircraft programs and designs.  Embraer deferred its E175-E2 due to its perception that scope clause changes will not be coming by 2019. No regional jet OEM can create a successful program if it cannot sell the aircraft in volume, which requires selling in the US market. The CRJ-700 and CRJ-900 meet US scope clauses.

Scope clause restrictions on the number of aircraft a major US airline regional partner can fly constrains regional jets sales in the US. Absent scope clauses, we believe regional airlines would serve many more communities with higher frequencies and require  additional regional aircraft. While the restrictions on aircraft size may help the CRJ against its competitors, the overall restrictions on the number of regional aircraft harms the entire market.

The US scope restrictions on aircraft size will be a factor in the economic life of the CRJ program. If the E175-E2 is allowed, its newer technology will place significant market pressure on the CRJ.  If new aircraft are not allowed, the CRJ remains competitive with the existing E-175 model. We produced alternative scenarios around four critical issues facing regional jet operators in the US, and it is scope clause restrictions that act as the “joker in the pack”. 

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I.  Executive Summary
II. The CRJ Program
II. The Regional Jet Market
III. Competition
IV. Comparative Economics
V. Program Outlook and Conclusions
VI. Appendix

Table of Figures
Figure 1 World Active Regional Jet Fleet
Figure 2 Market performance comparison, CRJ and E-Jet
Figure 3 Comparing Current Model Regional Jet Aircraft
Figure 4 Planned improvements from E-175 to E175-E2
Figure 5 E-175 & E175-E2 advantages over CRJ900NG
Figure 6 Potential CRJ re-engine choices
Figure 7 In-Service Regional Jet Fleet
Figure 8 Regional Jets by Seating
Figure 9 Bombardier and Embraer Regional Jet Market Share
Figure 10 Bombardier and Embraer fleet and average seat count
Figure 11 Bombardier and Embraer market share changes
Figure 12 Comparing Bombardier and Embraer models
Figure 13 Bombardier and Embraer parked fleet comparison
Figure 14 Comparing Bombardier CRJ and Embraer E-17X in-service vs parked
Figure 15 US regional airlines’ declining deprtures
Figure 16 US regional jet fleet 3Q16
Figure 17 In service US regional airline fleet
Figure 18 US in-service jet fleet
Figure 19 Distribution of EU Regional In-Service Jet Fleet by Country
Figure 20 EU In-Service Single-Aisle Jet Fleet
Figure 21 EU Single Aisle Fleet by Airline Type
Figure 22 EU Single aisle fleet by airline alliance
Figure 23  In-service EU regional jet fleet under 120 seats
Figure 24 Asia/Pacific regional fleet
Figure 25 Asia/Pacific regional jet fleet and age
Figure 26 Africa regional jet fleet
Figure 27 Africa regional fleet under 120 seats
Figure 28 US Airline In-Service Fleet
Figure 29 US regional fleet growth and Jet A prices
Figure 30 US regional fleet seat capacity switch
Figure 31 US Scope-Clause Compliant Regional Jets
Figure 32 Potential 2020 scope easing
Figure 33 US Passenger Volume by Flight Distance
Figure 34 US passenger traffic and commercial airline pilots
Figure 35 Comparing Regional and Delta Air Lines Pay Scales
Figure 36 Bombardier CRJ Current Competitors
Figure 37 Bombardier CRJ future competitors
Figure 38 500 Nautical mile missions
Figure 39 Operating costs on 500 nautical mile mission
Figure 40 Trip costs 500 nautical mile mission
Figure 41 Four Scenarios with High Likelihood
Figure 42 First Scenario - no scope change
Figure 43 CRJ Projection with scope intact
Figure 44 Second Scenario - scope does change
Figure 45 Projection with scope eased

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