KBRA expects continued growth in the regional aircraft market globally, supported by strong demand in the emerging economies of Asia-Pacific (particularly China), Latin America, CIS (Commonwealth of Independent States), and the Middle East, which will require new regional routes as global connectivity continues to expand. Demand is further underpinned by US and European airlines seeking to maximize capacity utilization. Importantly, in 2018, the two largest original equipment manufacturers (OEMs), Boeing and Airbus, have taken steps to establish dominant positions in regional jet production through acquisitions in Embraer and Bombardier’s C-Series. According to KBRA, this has been a significant event for the industry with positive long-term benefits coming from economies of scale. At the same time, new market entrants from Asia and Russia have made strides, with the promise of more competition in the long term.
Global new delivery demand for jets up to 150 seats is estimated at 8,230 and turboprops at 2,320 over the next 20 years, according to Embraer’s latest market forecast. This compares with Bombardier’s total new delivery projection of 12,550 aircraft in the 60-150 seat segment (valued at $820 billion) over the same period. The estimates reflect expected strong regional traffic growth due to increasing connectivity between midsize cities and fragmentation of historically dominant business hubs. In addition, turboprop demand is expected from emerging markets where this option provides the most viable solution for connecting people and goods transportation.
