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Cautious Optimism Surrounds Regional Aircraft Market

NEWTOWN, Conn., Oct. 6, 2014 (GLOBE NEWSWIRE) -- Forecast International has issued a new study, titled "The Market for Regional Transport Aircraft," in which the Connecticut-based market research firm predicts that manufacturers will produce 3,867 regional aircraft during the 10-year period from 2014 through 2023. This total includes both regional jets and regional turboprop airliners. The value of this production is estimated at $127.9 billion in 2014 U.S. dollars.

The Forecast International study notes that there is cause for cautious optimism regarding the possibility of sustained growth in the regional aircraft market. In terms of annual production, the market has been on a roller coaster since the industry downturn of 2009-2010. Nonetheless, various indicators now point to annual build rates in the market gradually increasing through at least 2020.

Forecast International projects that production will total 345 regional aircraft in 2014. The company predicts that annual output will then steadily rise to a level of 444 aircraft by 2020. The firm expects a two-year cyclical downturn in the 2021-2022 timeframe, followed by a return to rising production rates in 2023.

Retirements of older aircraft and growth in passenger traffic on routes flown by regional carriers are driving the market. In addition, operating economics are hastening the departure of the once-popular 50-seat jets that are still found in significant numbers in regional fleets. With the progressive relaxation of scope clause restrictions, many regional airlines are replacing the 50-seaters with jets sized in the 70-76 seat range. At the same time, larger-capacity jets seating 90+ passengers are being ordered by regionals unencumbered by scope clauses. They are also being ordered by low-fare carriers, mainline airlines, and leasing firms.

The study does caution that the resurgent demand for regional aircraft is taking place against a backdrop of a regional airline industry that is changing, which places some limits on the potential size of the market. Consolidation among major airlines has resulted in shrinking route networks and fewer opportunities for feeder work into these networks for regional carriers. This has provided the majors with considerable leverage over the regionals when it comes time to negotiate new feeder contracts or renegotiate existing ones. Forecast International senior aerospace analyst Raymond Jaworowski said, "Capacity purchase is clearly a buyers' market at the present time, with the majors holding most of the cards. And there is little chance of this changing in the near future." This situation is especially evident in the U.S. where, after consolidation, only three legacy airlines remain standing.

The regional aircraft market is attracting a number of new competitors looking to grab market share away from established players such as Embraer and Bombardier. These new players include COMAC of China, Mitsubishi of Japan, and Sukhoi of Russia. Sukhoi's Superjet 100 is in production, while COMAC and Mitsubishi have new regional jets in the development pipeline.

The Forecast International projections indicate that Embraer, Bombardier, and ATR will be the leading regional aircraft manufacturers during the 2014-2023 time period. Embraer is expected to produce 971 regional aircraft, worth $46.6 billion, during the forecast period. Bombardier is projected to build 741 regional aircraft, worth $32.3 billion. ATR is expected to build 739 aircraft, worth $17 billion.

Forecast International, Inc. (www.forecastinternational.com) is a leading provider of Market Intelligence and Analysis in the areas of aerospace, defense, power systems and military electronics. Based in Newtown, Conn., USA, Forecast International specializes in long-range industry forecasts and market assessments used by strategic planners, marketing professionals, military organizations, and governments worldwide. To arrange an interview with Forecast International's editors, please contact Ray Peterson, Vice President, Research & Editorial Services (203) 426-0800, ray.peterson@forecast1.com. Questions regarding sales may be directed to sales@forecast1.com.

CONTACT: Raymond Jaworowski, Senior Aerospace Analyst Phone: (203) 426-0800 Website: www.forecastinternational.com E-mail: ray.jaworowski@forecast1.com Forecast International, Inc. 22 Commerce Rd. Newtown, CT 06470 USA

Source:Forecast International, Inc.