While recent structural changes in the global airline industry did not have too much of a dampening effect on Airbus and Boeing in 2015, the rapid decline in fuel prices and macroeconomic weakness in developing markets had a profound impact on the smaller commercial aircraft manufacturers.
Embraer, Bombardier, and ATR have quietly carved out a niche in the 70-120 seat space over the last decade and a half, sitting underneath the Airbus-Boeing duopoly at the top of the commercial aircraft food chain.
2015 was not a banner year for these three manufacturers, as the factors above tamped down order activity. Still, the three manufacturers won a combined 312 orders and delivered 262 airplanes in 2015, which are only bad figures when compared to the peaks they enjoyed between 2011 and 2014.
Embraer vs. Bombardier vs. ATR Orders and Deliveries
The following list encompasses Embraer, Bombardier, and ATR orders, deliveries, and current backlog for 2015 broken out by aircraft family. The net order (new firm orders minus cancellations) and backlog figures are updated through the end of the year 2015.
Embraer
E170: 0 net orders / 2 deliveries
Current Backlog: 3
E175: 94 net orders / 82 deliveries
Current Backlog: 169
E190: 13 net orders / 8 deliveries
Current Backlog: 55
E195: 21 net orders / 9 deliveries
Current Backlog: 19
E175-E2: 0 net orders
Current Backlog: 100
E190-E2: 17 net orders
Current Backlog: 77
E195-E2: 40 net orders
Current Backlog: 90
Bombardier
CRJ-700: 2 net orders / 2 deliveries
Current Backlog: 10
CRJ-900: 25 net orders / 38 deliveries
Current Backlog: 44
CRJ-1000: -2 net orders / 4 deliveries
Current Backlog: 25
Q400: 26 net orders / 29 deliveries
Current Backlog: 41
CS100: -10 net orders
Current Backlog: 53
CS300: 10 net orders + 20 commitments (LOI)
Current Backlog: 190
ATR
ATR 42-600 – 11 net orders / 7 deliveries
Current Backlog: 38
ATR 72-600 – 65 net orders / 81 deliveries
Current Backlog: 216
Embraer and ATR dominate Bombardier
For the year, Embraer won 185 orders and delivered 101 aircraft, against figures of 51 and 73 for Bombardier. Moreover 26 and 29 of the orders and deliveries respectively were for the Q400 turboprop, which Embraer doesn’t even compete against, meaning that head-to-head, Embraer outsold Bombardier 185 to 25 and out delivered them 101 to 44. On the turboprop front, ATR won 76 orders and delivered 88 turboprops against 26 and 29 for Bombardier. At both levels of head-to-head competition, Bombardier was dominated – there are no other words to describe it.
The competitive figures for Bombardier must be particularly galling at the highest level, where the E190-E2 and E195-E2 have more or less matched the realistic sales figures for the CSeries once high risk orders such as Republic’s orphaned order for 40 CS300s are removed from the backlog. Embraer has seen strong sales for its two larger E-Jets E2 despite the superior economics of the CSeries, and that definitely speaks to underperformance by Bombardier’s sales team. That being said, Bombardier opened 2016 with a huge win for the CSeries in the form of an order from former E-Jet operator Air Canada, and there is cautious optimism that Bombardier may have turned the corner.
Embraer narrows its production gap to the E2
While Airbus and Boeing continue to grapple with production gaps on the A330 and 777 respectively, Embraer has narrowed its own gap to the next generation of E-Jets in rapid time. Thanks to robust demand for the E175 (more on this below), Embraer has now filled all of its 2016 and most of its 2017 production slots. It still needs to sell several slots for 2018, as the E2 will technically enter into service (EIS) in the first half of the year but most E-Jets delivered in 2018 will current generation ones. By our reckoning Embraer needs to sell an additional 40-45 E-Jets, which it could clear with just 1-2 orders from carriers such as Alaska Airlines. Once it sells those last few airplanes, it can begin to contemplate a production rate increase.
The E175 had a blockbuster year
If Embraer does win an order from Alaska, it will likely be for the E175 regional jet, which has now officially superseded the CRJ-900 as the jet of choice for regional feeder airlines or fleets worldwide. The E175, as we noted in our previous analysis, offers a better passenger experience than the CRJ-900 with slightly worse operating economics. Thanks to the low price of fuel, that gap in operating economics has shrunk, so the E175 has a sharp edge in most head to head contests. And Bombardier is in no position to offer the kind of financial discounts that would make the CRJ-900 more attractive. Since none of the fundamentals are due to change in 2016, we expect another banner year for the E175 and another year of mediocre sales for the CRJ-900.
ATR still reigns supreme amongst turboprops
Bombardier’s Q400 turboprop is a product with definite strengths, and with a recent certification to 90 seats, it is also the highest capacity turboprop on the market today. None of that matters. The Q400 has effectively been a “dead man walking” for orders since the Russian assembly line was delayed back in 2014, and low fuel prices have poured fuel on the fire. The primary selling point for turboprops against regional jets is lower fuel burn, and without that as an inducement, turboprops are mostly left to compete on the basis of having low acquisition cost. Even though the Q400 is relatively cheap, ATR has it beat on pricing, and that fact was once again reflected in a 4:1 orders advantage.
(culled from airwaysnews.com)
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