100-149 passengers further look

Some further comments are appearing in the internet concerning this market segment and about newcomers on the ground. Turbulence in the next five years will appear, AirEnsight argues that an important number of old models being recently sold (reducing investment costs) joined with airplanes with better economics will create an interesting market movement in the coming years.

Just for adding new arguments on the discussion I tried to analyze in detail the data summarized by Leeham concerning the current demand and deliveries of each aircraft. The market is reacting similar to other segments, on which important demand is concentrated at peaks in specific years, with important cyclic behaviour (take into account 2001 and 2002 gaps in this analysis). Looks like the train is only passing by at those years, and you need to be at the station. The right move was done by Embraer capturing important demand during early 2000s, seems that Bombardier came unfourtunately late to the game. For understanding SSJ100 sales we need to consider the mayority of sales are Russian influenced contries, pick in sales early 2010s reflect this.

 

The question to answer is: is an interesting segment to enter? I think that analyzing the market demand yearly is a mistake, previous graph only shows how cyclic airplane sales are, however, as airplane sales are actually multi-year contracts, I consider to use backlog of sales as a better reflect of the demand. Just taking a look to it, where we still see the cyclic behaviour of the market, the market seems to be very attractive, as an average 20% of grow in backlog has been materialized each year during the period. How many markets can offer this? And a market which is not likely to have bubbles like .com .

 

What I think is a sensible argument to understand to analyze the segment, is that this segment is an "entry point" to the biggest piece of the cake, 150-200, largely (lonely) dominated by Boeing and Airbus and currently protected by NEO and MAX for the next 10 years, that's the more attractive cake. For Airbus and Boeing this segment is still an interesting cake, but as part of a major development (designs focus aircraft family development on 150-200 segment, being this segment like a secondary target), meanwhile the other OEM need to perform a big investment for a relatively small segment without the support of other segments above for investment recovery.

So, we've got an interesting growing market with an important number of newcomers, it's not a "Bermuda Triangle" at the moment, but some ships are going to shrink due to competion and subsecuent pressure on prices. Is the right move of newcomers? Is the only potential move to grow with a risk of billions of dolars. I agree that next 5 years are going to be interesting for everybody, but year 6 to 10 will show the reaction of survivors, which will be further more interesting.