Projecting a $4.8 billion expansion of the worldwide MRO market to $41.8 billion by 2009, BACK believes that regional jets will account for $2.62 billion, or 55% of the market growth. This will surpass conventional narrowbody and widebody transports, which will respectively account for 34% ($1.64 billion) and 11% ($540 million).

All of this points to potential opportunities for operators of both independent and airline-owned MRO facilities willing to invest in the tooling and expertise needed to maintain the growing fleet of regional jets, not to mention the remaining turboprops, which will continue to operate in some niche markets.

MROs' Outlook

Air Canada Technical Services, now a separate limited partnership under the newly formed Air Canada Enterprises in Montreal, is preparing for a possible regional jet MRO market spike. In fact, the company has developed a regional jet airframe, component and engine MRO specialty during the past four years, aided in part by work rule changes brought about by parent company Air Canada's bankruptcy, from which it just emerged.

Bill Zoeller, president and chief executive officer of Air Canada Technical Services (ACTS), reported that the company repairs and overhauls about 85% of the components used on a Bombardier CRJ regional jet, some of which also are employed on the Embraer 145. The company maintains the GE CF34 engine, and does heavy airframe work on the Avro RJ-70, RJ-85 and RJ-100. While mostly focused on Air Canada's regional jets and those operated by its Air Canada Jazz low fare unit, ACTS counts six other operators - four in North America and two in Europe - as customers. Zoeller believes that the non-Air Canada portion of the business will grow. "Within the next 10 years, the number of regional jets could triple, presenting more MRO business opportunities, particularly for those shops that specialize in engines and components," he said.

In fact, Zoeller pointed out that in his company's case, approximately 15,000 regional jet component shop visits will have taken place during 2004 a figure expected to double within three years. On the CF34 engine side, shop visits for all of 2004 are projected to be 24; but that number is slated to reach 53 by year-end 2005. "While we will continue to do major airframe inspections, our future on regional jets is really in engines and components," he said. Zoeller cited several reasons for the anticipated growth in regional jet maintenance, aside from the numbers. One involves start up operators, most of whom do not have extensive repair capabilities. Along with this, many legacy carriers that perform heavy airframe checks in-house are finding it more cost effective to contract out engine and component work to specialists in those areas. Another reason, simply put, is that the regional airline fleet is starting to age.

"We believe that a 'bow wave' of (regional jet) MRO work is coming in both North America and Europe, because many are starting to require deeper levels of inspection, which will reveal more damage that will take longer to repair," said Zoeller. "At the same time, the engines are coming up on five to six years in service, which is when they must be pulled off the aircraft for major inspections."

For Delta TechOps, regional jets will be an important growth opportunity, especially in engine and component work. Udo Rieder, Delta TechOps' vice president of engineering and planning, said that some 90% of the company's regional jet business involves CF34-3A1 and CF34-3B1 engine inspections and overhauls, with the remaining 10% devoted to airframe electrical and mechanical component work. A decision to add the new CF34-8C is pending.

Delta TechOps is carrying out the engine work at Atlanta, in a shop that it opened in late 2003. Nearly all of the work, to date, is being done on behalf of Comair and Atlantic Southeast Airlines, the two Delta-owned regional carriers, both of which operate the Bombardier CRJ family. "We are doing about seven engines per month but expect that to increase to 10 per month by the late fall of this year," Rieder said.