Beyond Upgauging: The Enduring Viability Of Small Narrowbodies

Arjan Meijer
President & CEO
Embraer Commercial Aviation

Last month we published our 20-year Market Outlook. It’s our forecast for worldwide demand for new jets and turboprops in the sub-150-seat category. The report estimates that airlines will need 10,500 of those aircraft between now and 2043.

The number of new airplanes reflects more than just what is needed to accommodate the predicted 4% annual growth in global RPKs. Traffic has mostly recovered to 2019 levels with the exception of some parts of Asia. But things are not the same as they were before.

The post-pandemic landscape for commercial airlines is different. Demand and booking patterns are different. The business/leisure customer mix is different. The corporate workplace is different. Time will tell if many or all of those trends are permanent.

At the same time, the average aircraft size flown in key world regions is increasing, a reflection of the strong order backlog for new 170 to 200-seat narrowbodies. But larger aircraft are not always economically or operationally optimal for medium and lower-density markets, particularly when multiple daily frequencies are essential for those cities to stay well-connected.

It’s why we see continued opportunities for the sub-150-seat segment. Smaller narrowbodies go where bigger jets cannot. And they can go there more frequently, and usually more profitably. Naturally, carriers are upgauging aircraft to satisfy growing demand in high-volume markets. Yet we maintain that a mixed fleet of small and large narrowbodies is the best way to serve the diverse characteristics of an airline network.

The post-pandemic environment is different for the cargo sector, too. One section of our Market Outlook highlights trends resulting from the boom in e-commerce and supply chain disruptions. Consumers are driving the demand for faster delivery of shipments to secondary and tertiary markets. That, in turn, is opening the door for small capacity narrowbody all-cargo jets. It’s a segment that has tremendous potential, especially for aircraft converted from all-passenger configurations.

As our industry navigates its way into new territory, the sub-150-seat segment ensures both passengers and cargo move efficiently and seamlessly across the world’s airline networks.

Download our Market Outlook 2024: https://www.embraercommercialaviation.com/marketoutlook/