Printed headline: Upgrade Cycle
The market for large regional jets (RJ) is poised to see several new products, including Embraer’s new E-Jet E2s as well as the Mitsubishi MRJ, enter service in the next few years. In the meantime, current-generation models have some time to rack up orders—and Bombardier is confident that its CRJ line will benefit as a result.
“If you look at the fleet plans of the major airlines, they’ve continued to see, over time, phasing those out and upgauging to larger aircraft,” Bombardier Commercial Aircraft President Fred Cromer says. “We think [that] benefits primarily the CRJ900.”
The CRJ900 is a stretched and improved derivative of the 50-seat CRJ200, which helped usher in a new era of regional-jet travel and easily outsold its direct competitor, the Embraer ERJ-145. But the CRJ900’s success has been more muted.
The CRJ900’s total orderbook began the year at 444, or about 140 fewer than its direct competitor in the 76-to-90-seat market, the E175. Within the Bombardier commercial product line, only the CRJ200 (709) and the Q400 turboprop (614) have sold more units than the CRJ900. The model had the bulk of the company’s RJ backlog—24 of the 34 undelivered CRJs were the -900 version.
As regional jet manufacturers jockey for shares of what figures to be a lucrative market in the coming years, the CRJ900 is well-positioned to take advantage of near-term opportunities. The E175’s successor, the E175-E2, will not enter service until 2021; the family’s first member, the E190-2, is slated to make its debut with Norway’s Wideroe in April. The E175-E2’s timing is largely because Embraer wants to wait out pilot-contract negotiations at American Airlines, Delta Air Lines and United Airlines—each of which is set to start between early 2019 and early 2020—to see if scope-clause parameters change. Right now, the E175 is at the top of the 76-seat and 86,000-lb. maximum takeoff weight (MTOW) scope limits for large regional jets. The 98,800-lb. MTOW E175-E2 is too heavy, leaving Embraer in an unenviable spot.
Not having a next-generation Embraer model to worry about for a few more years, combined with the MRJ program’s delays and the lack of a credible threat posed by Comac’s ARJ21, gives the CRJ900 a window of opportunity. Bombardier is not standing idly by.
“The reality is, for the next few years it will still be between Embraer and us, by and large,” Cromer says. “We are coming up with a brand-new interior that we’re currently demonstrating to airlines.” The new Atmosphere interior, announced last year and set to debut this year, incorporates larger overhead bins and in-seat power.
“We canvassed the marketplace, and we talked about the specific requirements as our customer base [looks] forward on the CRJ,” Cromer explains. “Overwhelmingly, the answer was making a better solution to get more cabin stowage and refresh the interior. We’re trying to juice it up a little bit and make sure that we stay competitive in the marketplace.”
In the meantime, the in-service fleet of CRJ900s is expected to hold its own, even as newer competitors are introduced. Aviation Week’s Commercial Fleet & MRO Forecast sees the in-service fleet shrinking to 335 by 2028 from 440 today, a 3% annual decline.
The CRJ900 MRO market is more variable. It will decline over time, shrinking an average of 3.9% annually throughout the next decade. But the combination of the fleet’s maturation and the introduction of a few still-undelivered aircraft means MRO demand will climb for several years before quickly declining again.
Aviation Week’s forecast projects $479 million in aftermarket demand this year, excluding engine work. During the decade, demand will peak at $541 million in 2022 before bottoming out at $335 million in 2027. Total CRJ900 MRO demand is projected to reach $4.6 billion through 2027, excluding engine overhauls.
North America is expected to generate 67% of the aftermarket demand, followed by Europe (18%) and China (7%). North America—and the U.S. market in particular—is the most likely source for new orders as well. More than 450 50-seat Bombardier CRJs are still in service, the vast majority with U.S. regionals. If scope clauses are modified—by no means a foregone conclusion—the resulting push to upgauge could see content CRJ200 operators upgrade to the 76-seat version.
“We feel very good about the CRJ and the position of the CRJ as we look forward to a replacement cycle that is going to come our way in North America,” Cromer says.