mr-cf34nigelhowarth-awstpromo.jpg.crop_display.jpg Nigel Howarth/AW&ST

CF34 MRO Market Set For Growth, Change

The CF34 fleet size will be both the same and very different in 2025.

The CF34 aftermarket, like the regional jet fleet it helps power, is a tale of two fortunes. On the lower end, shifting airline strategies are pushing General Electric CF34-3-powered Bombardier CRJ200s out of major airline fleets in favor of larger, more efficient aircraft. The knock-on effect is that larger regional jets (RJs)—notably the CF34-8-powered Embraer 170s and 175s and the -10-powered Embraer 190s and 195s—are taking on more prominent roles, boosting capacity by bumping smaller aircraft without adding frequency to airline schedules.

At the lower end of the scale, the demise of the 50-seat RJ has been seemingly imminent since oil prices pushed into the mid $100s in 2008, helping trigger the Great Recession. “The trend of fewer flights by aircraft with fewer seats is expected to continue, as virtually the entire small-regional-jet fleet in the United States will be retired over the coming years,” a recent Transportation Research Board analysis says. The report includes a chart from respected fleet analyst Ed Greenslet showing the “small” RJ fleet—those with 70 seats and under—shrinking from 1,000 today to nearly nothing by the middle of the next decade.

While airlines are clearly pushing the smallest RJs aside, the fleet—and notably the CF34-powered portion—still has a few cycles to fly before it is relegated to the boneyards.

American Airlines ended 2013 and 2014 with 138 CRJ200s, and had planned to hold steady through 2015 before deciding to retire nine. The company also projects to be operating 159 larger CRJs by year-end, up from 138 at the start of the year.

Delta Air Lines parked 30 CRJ200s in the first half of 2015, but still was operating 223 larger CRJs as of July 1.

Air Canada feeder partner Jazz Aviation has boosted its fleet of CRJ200s to 32 from 26 since Jan. 1, and has long operated 16 CRJ705s, though a revamped capacity-purchase agreement between the two carriers will see Jazz transitioning to a smaller fleet of larger-gauge aircraft through 2025.

Aviation Week’s Fleet and MRO Forecast puts the CF34 market at $1 billion in 2016, rising to $1.6 billion in 2025—a compound annual growth rate (CAGR) of 4.8%. Growth at the higher end will offset the reductions in the 50-seat market.

Aviation Week sees the CF34-3 aftermarket declining sharply, as overhauls drop from about 530 in 2016 to less than 120 in 2026. The dominant CF34-B fleet’s MRO CAGR will decline 19% per year, The CF34-3 series’ share of the total CF34 MRO market, close to 50% today, will drop to about 7% in 2026. 

The upper end of the CF34 scale has much brighter prospects. The CF34-8-powered Embraer 170/175 fleet, approaching 500 in-service aircraft, will be boosted by deliveries of the manufacturer’s 250-aircraft backlog—part of the upgauging shift parking smaller RJs. The -8 overhaul market will rise at an 11% CAGR clip, growing from $361.2 million in 2016 to $979 million in 2025, pushing its share of the total CF34 market from 35% to 62% in the process.

The combined Embraer 190 and 195 fleet, currently close to 650 aircraft, will grow by about 140 aircraft in the coming years if all outstanding orders turn into deliveries. That will help drive CF34-10 maintenance revenue. The forecast projects annual overhauls will average 239 per year over the next decade, peaking at 344 in 2023. The shift will push the CF34-10’s share of the total CF34 MRO market from 15% in 2016 to 26% in 2025, growing from $154 million to $487.8 million, a 14% CAGR.

While the CF34 fleet mix will change significantly, the total fleet size during the forecast period will steadily rise and then fall again to roughly the same level as the starting point. Next year’s total of 5,644 engines in service will rise to a peak of 6,004 in 2020 before declining steadily to 5,700 in 2025. 

Editor's note: this article has been updated to clarify that Jazz has not added any CRJ705s to its fleet in 2015.

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