Regional Aircraft Values Face No Better Than Mainline Jets

摘要

The regional jets, particularly in the U.S., are seen by some as a possible source of optimism in terms of meeting the demand or traffic when passengers start flying again but values have fallen by more than 30 percent and will face difficulty in achieving an improvement as a result of new aircraft discounting and corporate collapses. The market for the 50-100 seat regional jets has floundered during the Covid event in common with other aircraft categories. Hundreds of regional aircraft were already in storage before the Covid event and many more have been added to the parking lots. Yet, the demand for 50 seat regional jets post 2001 and the increased emphasis on smaller aircraft for a time specifically in the U.S. is seen as justification for not seeing a significant reduction in the value of regional jets and the Embraer E175 in particular. The U.S. market post 2001 did indeed result in an increase in demand for 50-70 seaters and production of the CRJ series increased (although Embraer ERJ deliveries fell). The U.S. operators sought to more match capacity with demand. Yet the U.S. operators, with scope clauses, also realized that it was less expensive in terms of flight crew costs to operate smaller aircraft and such was the severity of the 2001 recession that the number of the more expensive mainline crews were reduced. Even with this switch to smaller aircraft, values of the regional jets still fell post 2001 and production of the 50 seaters ceased a few years later as scope clause creep allowed the use of larger regional jets. Because the U.S. was the main market for the 50 seats, the disposal of this category quickly created a surplus with the result that values failed to recover.