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Narrow Body Industry Overview And Characteristics
Over the last five years, the aviation industry has
seen a shift as carriers move from large quantities
of smaller narrow body aircraft to planes with a
higher passenger capacity. Differences found over
time in the size and types of aircraft owned or
leased by narrow body aircraft carriers is evidence
to the fact that the line between mainline and
regional carriers is blurring. Immediate predictions
for FY 2014 specifically state that “the retirement
of older inefficient aircraft (many of which are
narrow-body)” will occur (United States 49).
According to an FAA forecast, “while demand for
70-90 seat aircraft continues to increase, we
expect the number of 50 seat regional jets in
service to fall, increasing the average regional
aircraft size in 2013 by 0.5 seats to 57.7 per mile,” (United States 2). Over time, aircraft that will
be affected include “A320’s and B757-200/300 in their domestic route networks with next
generation, narrow-body aircraft like the A320 Neo and the 737 Max” replacing them (United
States 49).
The commercial passenger carrier fleet is changing. The commercial carriers are retiring older,
less fuel-efficient aircraft (e.g. 737-300/400/500 and MD-80) and replacing them with more
technologically advanced A320 and 737-700/800/900 aircraft. The regional carriers are growing
their fleet of 70 to 90 seat regional jet aircraft and reducing their fleet of 50-seat jet aircraft.
The total number of aircraft in the U.S. commercial fleet (including regional carriers) is
estimated at 7,024 for 2012, a decrease of 174 aircraft from 2011. This includes 3,781 mainline
air carrier passenger aircraft (over 90 seats), 840 mainline air carrier cargo aircraft, and 2,403
regional carrier aircraft (jets, turboprops, and pistons).
There are multiple customer segments of the aircraft industry to consider when examining the
future of the narrow-body aircraft. For instance, business and corporate travel has gone through a
period of decline followed by growth in the last five years. “The pace of recovery in business and
corporate aviation is largely based upon the future prospects of economic growth and corporate
profits” (United States 73). Another segment, cargo, has “seen two years of negative growth and
is below pre-crisis levels, but is forecast to return to modest positive growth in 2013” (IATA
CAPA 1). There are other influences on the market, aside from sales trends and customer
influences, to consider such as fuel prices and regulations. Starting August 2013, all Part 121
pilots, “captain or first officer, must have at least 1,500 hours of flight time and a first-class
medical certificate or they will be grounded from Part 121 operations” (Part 121). The prediction
is that the regional carriers would be more likely to be negatively impacted by this new
regulation as the first officers may not have the required certification (Part 121). An analysis of
the influence of fuel prices on the industry states that, “if oil prices were in fact to increase to
USD130, it is not hard to envisage as much as 15-20% reductions in long-haul seat offerings”
(CAPA 13).
In the narrow-body market, there are a few models and brands that have dominated the industry
as of late and are predicted to continue to do so. Boeing recently released a new jet called the
BBJ 3, based on the 737-900ER model and made to fly 4,900 miles without refueling farther
than the ACJ model of their counterpart (Boeing). According to Boeing, “the company says its
BBJ line of business jets outsells Airbus seven to one…at $75-90 million apiece” (Boeing
Unveils). The A320 is a popular model in the Airbus line and was used by 4 out of 11US Majors
within the past five years. Boeing 737 has been used by 5 out 11 US Major carriers and holds a
higher daily utilization rate than its counterpart, the A320. Activities of popular regional carriers
are demonstrative of the forecasts and analysis of the FAA. For instance, WestJet “announced it
will sell 10 Boeing 737-700 aircraft to an undisclosed third-party in 2014 and 2015, and will buy
10 Boeing 737-800 aircraft” (WestJet). In accordance with the market trend, WestJet desires to
shift the size of their aircraft to meet demand.
An alternative to the jet, turboprop planes have seen an increase in demand lately due to their
economic benefits and capabilities. Key regional carriers such as WestJet and Alaska Air have
decided to incorporate turboprops into their fleet. Substituting the Boeing 737s, the Q400s will
“be cheaper to operate than 737s and offer the airline better flexibility to fill schedule gaps
and better cope with lower demand periods,” (Alaska Air). WestJet’s Pugliese describes their
purchase as having the ability to “enhance our frequency between markets and will not only
enable incremental growth from new markets but also enhance our overall value for the business
market” (WestJet). The two main producers of turboprops on the market right now, ATR and
Bombardier, are looking into expanding the size of their aircraft along with the other narrowbody planes. In determining whether or not to move forward with this project, Bombardier
conducted research and determined that the market would reflect a need for “2,400 new
deliveries in the combined turboprop sector over the next two decades” (Bombardier). ATR is
adding a 90-seat turboprop to their line, recognizing an industry need. Furthermore, ATR “noted
that in the market for 50- to 90-seat aircraft, turboprops now account for some 85 percent of
orders, of which ATR had achieved a 70-percent market share” (ATR).
Globally, purchases of narrow-body aircraft have followed similar trends and are moving
towards larger aircraft. In India, the Indian Navy created a similar plane to the Boeing 737800(NG), the P81 (Indian Navy). Looking to expand their flight path capabilities, Latin
American airline GOL is using Boeing 737NG jets to fulfill their new availabilities, as they are
able to go the required distances (GOL). Jet Airways has recently looked into buying fifty (50)
737 Max planes and ten (10) 777-300ER as India’s main carrier (Etihad). 1
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Works Cited: United States. U.S. Department of Transportation. Federal Aviation Administration. FAA , Aerospace Forecast: Fiscal Years
2013-2033. N.p.: n.p., n.d. Print.