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Is China the next big market for regional jets?
Dec 28,2016
China is about to publish a new policy encouraging airlines
to develop and operate second-tier routes. The new legislature might lead to
more orders for major players in the regional jet market, including Canada¡¯s
Bombardier and Brazil¡¯s Embraer. With stiff competition to be expected from
China¡¯s first homegrown passenger jet ¨C COMAC¡¯s ARJ21 ¨C it looks like the
emerging market might be tough to conquer.
Although the policy has not yet been officially published,
industry sources cited by Reuters point out that newly established airlines
will have to gather a fleet of no less than 25 small regional jets in order to
get permission to fly larger planes.
Industry sources consider this policy as China¡¯s way of preventing
airlines from exploiting niche segments as a shortcut to the profitable major
city market, serviced mostly by Airbus and Boeing aircraft. On the other hand,
the updated rules might create obstacles for new airlines to grow, as commuter
routes are not that profitable. Moreover, the routes overlap with those offered
by the growing high-speed train network, which creates an even more competitive
environment.
New legislature should provide more incentive to purchase
regional jets, including the indigenous ARJ21, but also Bombardier, Sukhoi and
Embraer aircraft. However, preferential treatment to homegrown technology might
hinder the plans of foreign plane manufacturers to grab a large piece of the
market pie. That is, of course, if the Chinese-built regional jet (boasting 400
orders) proves to be superior for domestic airlines.
Embraer, COMAC, AVIC Xi¡¯an Aircraft will attend Civil
Aircraft Industry International Forum 2017 on May10th - 11th, 2017 in Shanghai
to talk about this topic. This forum is hosted by Chinese Society of
Aeronautics and Astronautics and has ran 7 years.
To figure out more, please do not hesitate to
contact Olivia Liu, marketing@galleon.cc
News Source: AeroTime