Narrowbody Market Shift

AirInsight last week published a report about the narrowbody market, especially about the 100-149 seat segment. What they found is that - in their opinion - the failure of aircraft in this segment was due to either weak OEM's (and I guess that this means that the OEM was undercapitalized) or due to the fact that the aircraft were no clean sheet designs optimized for that market segments but rather derivatives of (mostly) larger planes. As such a "shrink", an airplane carries a lot of weight that is not needed for it's role. For example the wings are too large and heavy, as they were designed for the original and larger aircraft.
The only aircraft that is currently in production and is a point design is the EMB190/195 family - where the EMB195 seems to be a bit underpowered in terms of takeoff length at MTOW, but the thrust is OK for typically flown routes below 1000nm.

The BAE146 family (later Avro RJ family) was build in almost 400 copies, so it was not a failure at all. But in the wake of 9/11 British Aerospace decided to cease the RJX project, a twin engined enhanced version of the RJ family. This also market the end of british commercial aircraft production.
If the Sukhoi Superjet will have success in the market remains to be seen, but one has to be a little bit sceptic - less so about the safety and the overall technical standard, as most of the systems are coming from the western suppliers which also supply Boeing and Airbus. But Sukhoi (so far) cannot show their customers a worldwide MRO and customer service presence. And production output is disappointing so far. Another problem might be the engine. The basic design is like the PW6000, optimized for low maintenance costs rather than for fuel burn. This was OK when the engine was chosen in 2003 when oil prices were in the range of $30/barrel, but today crude and thus kerosene is three times costlier.
That brings us to the newest design: the Bombardier CSeries, which comes in two sizes. It is designed for the 100-149 seat market and therefore a little bit above the EMB190/195. The engine (the PW1524G Geared Turbo Fan from P&WA) was chosen in 2008, just ahead of the official launch of the aircraft. In 2008 oil prices were at and above $100/barrel. Thus the engine was chosen with a low fuel burn in mind - although the Geared Turbo Fan also promises to bring advantages in maintenance costs.
Meanwhile, when we look at the narrowbody backlog and the deliveries from Airbus and Boeing, it is obvious that airlines are going away from the shrinked 6 abreast narrowbodies as in the current cost environment they cannot be flown with a profit anymore (some low cost and ultra low cost airlines are exceptions). The deliveries of the B737-700 as well as of the A319 are at a low, both below 10% of the overall deliveries. Just a few years ago their share was at 30%.

Airbus A320 family deliveries

B737NG family deliveries

When we look at order intake, we see that new orders for the A319 and the B737-700 have been slowing considerably in the last years. Even after the neo version was launched, the A319 did not gain much orders. The B737MAX is included in the Boeing order intake chart, but there is not a single order for the B737MAX-7 so far.

New orders for the Airbus A320ceo/neo family

New orders for the Boeing B737NG family

If we compare the order backlogs at the beginning of a year and at the end of that same year and we then factor in deliveries and new orders, we get cancellations and/or order changes, for example when a customer changes an A319 order into an A320 order. This can also be called the net order intake.

Net order intake for the A320ceo/neo family

Net order intake for the B737NG family

We can clearly see that both the A319 and the B737-700 have negative net order intakes for most of the last years.
Now - is the 100-149 seat segment a "bermuda triangle" where all aircraft will disappear from the marketplace? I don't think so. It is just not viable to serve a market that has about 130 passengers per flight with an aircraft that is designed for 180 passengers. But as soon as there is an aircraft with, say, 130 seats, that offers the same seat costs as a B737-800 or A320 with about 180 seats there will be someone who will serve that "niche". And there should be a lot of "niches" out there. I am sure: once the CSeries successfully completed the first phase of the flight test, we will see some good orders for that aircraft - especially the CS300. These might not come in blockbuster sizes like some of the A320neo and B737MAX orders we have seen over the last months, but this aircraft will not be sunk in the bermuda triangle.
As well as I predict a bright future for the EJet G2 family and the larger types in particular. But Embraer might have to react a little bit sooner and faster than they thought.