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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

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