With no full-blown recovery in air transport demand predicted before 2005, regional airlines will be looking for low-cost fleet development solutions for the next couple of years, according to BAE Systems Regional Aircraft senior v-p of asset management Paul Stirling. BAE, which ditched its own Avro RJX development in late 2001, now expects remaining regional jet manufacturers Embraer and Bombardier to face ever-tougher trading conditions as the capital markets tighten money supply for new aircraft.
Stirling told a December 13 press briefing in London that as air-transport demand shows little or no sign of lifting in the short term, “the financial community is increasingly concerned about asset values of aircraft.” He argued that with banks now turning off the cash taps to airlines, manufacturers and their associated export credit agencies will have to make up the capital shortfall to keep the new sales coming. In his view, manufacturers’ shareholders will not tolerate the resulting negative effect on the bottom line, forcing airframers to pass on unprofitable deals done purely to shore up market share.
