Bombardier is facing a soft backlog for their CRJ line. This backlog news isn’t new. The CRJ line is about to add a new interior and customers have been waiting to see it.
Consequently, Bombardier has been looking at different scenarios to adjust its labor resources. This is required by Canadian law; unions and contractors must be notified. A temporary rate reduction to adjust with orders is possible, but not expected before June.
In the meantime, there are ongoing campaigns. There have been slow orders for the CRJ, but investing in a new interior which is what airlines want. Bombardier shared that they hope to be able to announce a launch customer for the Atmosphère cabin soon.
The market for regional aircraft remains USA-focused. As RAA Chair Bryan Bedford noted in his 2017 address “(regional airlines) operate 42% of all scheduled departures in the United States.” A decade ago the average regional in US service seated 50 and now the average is 62. There were about 1,660 regional jets in service in the US at year end 2017. As this chart from the RAA illustrates upsizing worked for the big airlines. But even regionals have seen their own upsizing effect.
US regional airlines provide the only air service at 64% of US airports. This underscores the crucial role the regionals play in connecting communities to the network.
Looking at the in-service US regional fleet we see the following. This fleet averages just over 10,000 daily departures. It is a hardworking fleet. As aircraft have grown in capacity, departures have declined. The industry faces some tough challenges, not the least of which is finding enough pilots. here are the top 15 regional airlines in the market and their fleets. Some of these airlines are surprisingly big. Several have larger fleets than major airlines outside the US.
The industry has several fleets that are aging, highlighted in yellow. We suggest that each of the highlighted cells represents an ongoing campaign for Bombardier and Embraer. Given that these regional airlines are facing the thinnest margins ever in an industry with thin margins, each campaign will be a tough fight between the only two OEMs that operate in the business. Bombardier may be slowing its CRJ line for now, but the market clearly offers several opportunities to allow an acceleration again.
Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.
