Regional Builders Are Charging Ahead
As Scope Clause Boosts Impact of Paris

Regional jets are a great idea, as they let airlines tailor the number of seats they make available to smaller destination cities, opening up whole new markets to passenger air service. But pilots' union scope clauses limit their sale in the world's biggest market, the U.S., lending Le Bourget an even greater importance for regional jet manufacturers.

Scope clauses effectively force airlines to pay pilots of smaller jets on the same scale as big-jet flyers. Because of the scope clause situation, "it's really up to the Europeans and the Asians to keep the market going," observes Richard Aboulafia, lead aerospace analyst with the Fairfax, Virginia-based Teal Group. Europe, he says, is "the only truly open market for large regional jets."

Asia, while perhaps not a genuinely open market, is a big one. Far East markets will take some 700 regional jets over the next 20 years, says Fairchild Dornier market research director Mike Miller. And while the biggest segment of that market, China, remains the hardest to gauge, the German-American company has committed itself by just this year opening an office in Beijing. "It is a market that deserves a lot of analysis and certainly a lot of resources," Miller says.

Fairchild Dornier is the third biggest regional jet manufacturer worldwide, but claims to be the first to place new-generation regional jets in China, having already delivered 16 328JETs to Hainan Airlines.

The company's other priority is the 728JET family. Assembly of the first three 728JET fuselages began in Oberpfaffenhofen, Germany, this past March; first flight is slated for the first quarter of 2002 and the 728JET is to enter service in mid-2003. The 728JET and its derivative 528JET and 928JET aircraft will cover the broad 55- to 110-seat market, with initial focus on the 70-seat segment.

"It's essentially a new market," Miller says, noting that there are already some 400 70-seat aircraft on order.

Worldwide, Fairchild Dornier expects to notch some 1,100 regional jet deliveries by 2010. The figure could reach 1,500 if scope clause situation changes and Latin American and Chinese markets develop favorably, Miller says.

According to Teal, the overall regional aircraft market is peaking this year, with deliveries of 453 aircraft expected in 2001. The market will then dip, Teal says, but only slightly, and rise again toward the end of the decade (see chart), for a total of 2,964 regional jets and 928 prop aircraft through 2010. The two market leaders are Brazil's Embraer and Canada's Bombardier (Canadair).

Embraer has just delivered its 400th regional jet, a 50-seat ERJ 145, to Switzerland's Crossair, which has ordered 25 145s and taken options on 15 more. Crossair's 200-aircraft order two years ago also included 70-seat ERJ 170s and 108-seat ERJ 190-200s. Orders and options for Embraer's ERJ 135/140/145 family of regional jets exceed 1,230.

Bombardier delivered its 500th CRJ (Canadair Regional Jet) to Atlantic Coast Airlines this past April. The company claims more than 1,500 firm and conditional orders for its new, 70-passenger CRJ700 alone. Bombardier also offers the "Q" series of twin-engine turboprops, based on the de Havilland Canada Dash-8 line, but fitted now with active noise attenuation for a quiet ride.