F
R

8
-
2
0
0
0

ORDER BOOM FOR REGIONAL JETS

The US leasing company GECAS (GE Capital Aviation Services) demonstrated its faith in the market for regional jets in Berlin in a big way. The company, which already owns 950 commercial aircraft, placed record orders for the new models from Fairchild Dornier and Embraer, potentially worth a combined total of $7.8 billion (DM 16.1 billion). Shortly after the end of the air show Bombardier too was rewarded with a $3.9 billion order.

This mega-order is especially welcome to Fairchild Dornier after its recent financial troubles. Before ILA 2000 the only commitments on the books for the 728JET were the 60 firm orders and 60 options from Lufthansa CityLine. Thanks to GECAS, it now has another 50 orders worth US $1.4 billion (DM 2.9 billion) plus a further 100 options.

The third customer to surface in Berlin was Munich-based Bavaria International Aircraft Leasing, which placed an order for two 728JETs (plus another two options). But even more significant is Bavaria's decision to buy four 928JETs (plus two options), which makes it the first customer for this stretched version. The total value of Bavaria's investment is US $305 million (DM 630 million).

If we add on the order from the Austrian company Air Alps Aviation for five 428JETs and three 328JETs, also announced in Berlin, then, including options, Fairchild Dornier has collected a cool 604 orders worth around US $12 billion (DM 24.8 billion).

All the company has to do now is build the aircraft, but that will not be quite so simple, as Charles Peiper, recently placed in charge of the company by its the new majority shareholder, Clayton, Dubilier & Rice, is only too aware. In his first 60 days in the job he carried out a "reality check". This brought to light a number of problems such as staff shortages, an insecure workforce and subcontractors who were dragging their feet. These problems should be eliminated by the refinancing.

Even so, programme slippage is unavoidable. Realistic schedules now assume that final assembly of the 728JET will commence this August. The company will now aim to deliver to Lufthansa CityLine in July 2003, a year later than was originally intended. The 928JET should follow 18 months later. The 428JET will also be late, with first deliveries in March 2003. All the models need work to be done on weight reduction.

The delay at Fairchild Dornier will probably mean that Embraer will be first to the finishing post with its ERJ-170. This 70-seater is still expected to be ready for Crossair at the end of 2002. GECAS placed 50 firm orders and 100 options for the ERJ-170/190 in Berlin. The total price for these orders comes to $3.6 billion (DM 7.4 billion), which means that the Brazilian planes are an average of $4 million cheaper.

Bombardier's prices are probably somewhere between the two, but the available details of the Canadians' contract with GECAS which was announced after the Berlin air show do not make for easy comparisons. The deal is for 15 of the smaller CRJ200s, 25 CRJ700s and 10 of the CRJ900 model, which is still on the drawing board, plus 100 options where GECAS is free to choose the model as it pleases. The value of the orders was stated at $3.9 billion (DM 8 billion).

Former Fairchild executive Earl Robinson can only dream of such figures for his recently founded Alliance Aircraft Corporation. At the air show he presented the first details about Alliance's planned StarLiner family. The 70-seat StarLiner 200 and the 90-seat StarLiner 300 have a design that is similar to their rivals, the 728JET and the ERJ-170.

The Alliance models have many of the same systems, such as fly-by-wire flight control system, a Honeywell Primus Epic avionics system with five liquid crystal displays and the BR700 engine from Rolls-Royce Deutschland, with a thrust rating of 13,000 to 16,000lb. Even the fuselage is similar, with a cabin diameter of 3.45m (11.3ft). Both models have a cruise speed of Mach 0.8 with an operational ceiling of up to 12,500m (41,000ft).

The unit prices, at $18.9 million (StarLiner 200) and $24.3 million (StarLiner 300) should compare favourably with the competition. As far as financing is concerned, according to Robinson the programme only requires $660 million. $150 million has already been raised from private backers, $250 million is expected to come from investment banks, and the rest from supplier partners.

Robinson plans a production rate of 15 StarLiner 200/300s per month. These will be built at the Pease International Tradeport in New Hampshire, a former USAF air base. To date letters of intent have been received for 30 aircraft and Alliance intends to launch the programme this summer. If a 110-seat stretched version arouses similar customer interest, that programme could be launched in the autumn of 2001.

Marketing is also under way for the StarLiner 100 family of 30 to 50-seat jets. For the powerplant, Alliance Aircraft is considering the Allied Signal AS900, which has a thrust rating of between 6,000 and 8,000lb and would deliver a cruise speed of Mach 0.8. Development costs according to Robinson will be $320 million.

Alliance Aircraft is currently talking to Suchoi about a possible teaming agreement on development, marketing and production.

From page 26 of FLUG REVUE 8/2000