OEMs see 50-seat RJ market dwindle

 - October 30, 2006, 11:28 AM

Twilight has fallen unceremoniously on the heyday of the 50-seat regional jet, and Bombardier’s October 28 announcement that it would suspend production of the CRJ200 only underscored that fact. Of course, the recent bankruptcies of Northwest Airlines, Delta Air Lines and Independence Air haven’t helped, but signs of a meltdown came long before any CRJ operators stopped deliveries or started grounding airplanes.

Over the past few years backlogs of 50-seat jets have progressively eroded until, today, they stand at their lowest points since the CRJ and ERJ products burst onto the scene in the early and mid-1990s. The CRJ backlog, which stood at 55 at the end of September, shrank to 37 as a result of SkyWest Airlines’ October decision to convert a firm order held by its Atlantic Southeast Airlines subsidiary for 18 CRJ200s to CRJ700s. Another batch of CRJ200s earmarked for bankrupt Mesaba Aviation but whose deliveries mainline partner Northwest Airlines halted account for 15 more, two of which Mesaba had taken before the delivery suspension.

Bombardier hopes to clear the backlog by convincing Spain’s Air Nostrum to convert most, if not all, of an order for 19 CRJ200s due for delivery starting late next year to CRJ700/900s. A single suspended delivery of a US Airways airplane and a pair of airplanes destined for Japan Air Lines account for the rest of the September 30 backlog.

Bombardier insists it will not build any “white tails” and that its Challenger 850 business jet will keep the line running with or without CRJ200 production. Still, the CRJ200 closure means the remaining 660 of the 1,135 layoffs at Bombardier’s Montreal area and Belfast plants will go ahead as announced in August.

Bombardier continues to call the production suspension temporary, and maintains that it would encounter little problem building airplanes to order, precisely because the Challenger 850 uses the same line. But with Northwest’s delivery suspension, Delta’s planned removal of 11 CRJs from the Comair fleet this month and Independence Air’s grounding of 28 more last month (it returned 29 to their lessors earlier this year), a surplus of used 50-seat CRJs has now accumulated, leaving some wondering whether Bombardier will ever carry out large-scale CRJ200 production again.

Future Cloudy for ERJs

Although the latest wave of bankruptcies didn’t involve any Embraer operators, the ERJ 145 series backlog has also dwindled to double digits, raising questions about the future of that line as well. Located at Embraer’s headquarters in São José dos Campos, Brazil, the line also produces the basic structure of the Legacy business jet and the various military and search-and-rescue variants of the ERJ 145, all of which account for only a handful of airplanes each year.

Embraer had previously signed a deal to assemble U.S. Army ERJ 145-based surveillance airplanes in Jacksonville, Fla., under partnership with Lockheed Martin, but the Army has since said it wants a bigger platform. Embraer has proposed the 170/190 as an alternative.