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Values of CRJ900 Continue to Tumble

June 10, 2019

The historical trend of CRJ900 values highlights the problems associated with a variable new pricing and relatively limited market opportunities.

The values of the CRJ900 initially enjoyed some stability when entering service in the early 2000’s. Operators had been seeking more capacity ever since the CRJ100 had entered service a decade earlier and even the CRJ700 was not large enough for some, particularly in a deregulated environment. As the market increasingly focused on Embraer products, the demand for the CRJ900 wavered. The financial crisis of 2008 inevitably caused a significant fall in values, as it did for all aircraft types. Between October 2007 and October 2009, the value fell from some $21.3 million to $15 million, which was relatively limited partly because of its recent service entry. Values subsequently stabilized but again started to fall as the age of the aircraft, compared to the competition, started to show. The need for a scope clause compliant aircraft provided some relief but not enough to see a halving of value in the last four years.

The CRJ series is currently still being produced by Bombardier although the company is looking at strategic options which means that the program is looking to be sold – or shut down. The Dash8-400 program has already been sold to Longview, the owner of Viking who now produces the Dash6-400. The CRJ900 is the only CRJ variant for which meaningful orders exist although these continue to be placed in limited numbers such that the order backlog is fortunate to equate to two years at any one time.

The current negative experience of the CRJ900 is to be expected given the heritage of the type as a business aircraft and the length of time that the type has been produced. Moreover, there have a number of modest upgrades to the type over the years although the much needed engine replacement has never been forthcoming perhaps because of the limited market. The CRJ900 has however, benefitted from the sustained constriction of scope clauses which requires some U.S. airlines to fly smaller and less efficient aircraft to preserve the opportunities for pilots who are in very short supply. The scope clauses have perhaps been the main reason why production has continued but with MRJ and Embraer offering much more efficient products, the scene is set for problems for the CRJ900 going forward.

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