Can the 75 seat jet market prove more successful than the 100 seat market for Russian manufacturer Sukhoi? The company announced a Letter of Intent from S7 Group, parent of S7 airlines, to purchase 50 SSJs shrunk to 75 seats from the current 100 seat layout. The deal also includes options for 25 additional SSJ75 frames.
Shrinking to the 75 seat market puts Sukhoi in direct competition with Bombardier and Embraer, a pair of well established players in the regional jet space. Then again, the 100 seat model also directly competes with models from the two companies, so that positioning is hardly new. And it remains a major challenge for Sukhoi. The SSJ100 never realized wide commercial appeal, though more than 100 are flying today. It is unclear the shrunk version will fare better on that front.
Sukhoi tried in recent years to build new markets for its SSJ line. The company proposed the SSJ100 as the perfect type for a professional sports team charter, for example. The Sukhoi Sports Jet included four cabin zones on board, allowing for players to relax, study film or recover after a match. That plan went nowhere, but the creative approach to building markets is respectable.
Kicking off the new 75-seat design with a commitment for 50 frames is a solid start. This being a LoI rather than a firm order makes it more of a solid reason to begin a little engineering work versus ramping up the production line. But it is a start.
Breaking the duopoly
Sukhoi could also benefit from the growing partnership between its parent, United Aircraft Corporation, and China’s COMAC. The latter has the C919 single-aisle 737/A320 competitor under development and the ARJ21 in production, serving the 70-seat market. The ARJ21 is likely not long for this world but it served as a solid test bed for manufacturing techniques and processes. Combining that manufacturing skill with the UAC/Sukhoi product line and suddenly the Sukhoi/COMAC combination has what appears to be a full product suite, from 70 seats through 250+.
And China remains one of the fastest growing aviation markets in the world, set to surpass the USA by 2022 in total passenger volume, according to IATA. Toss in an investment by Chinese OTA CTrip in Boom Aerospace’s supersonic plans and suddenly there’s an interesting market dynamic splitting that region off from dependence on the Airbus/Boeing duopoly for larger jets or the Bombardier/Embraer pairing for smaller jets.