Brazilian company, the world’s leading maker of aircraft with up to 150 seats, has been gaining customers in other segments

10/24/2022

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Embraer estimates that the global demand for new aircraft of up to 150 seats in the next 20 years will be 10,950 units — Foto: Divulgação

Embraer, the leading maker of aircraft with up to 150 seats, has been gaining strength to advance on its rivals’ territory abroad with the growing demand for the E-Jets E2 family. With the E195-E2, the Brazilian company has explored segments disputed by Airbus’s A220 or the smaller models in Boeing’s 737 family, and won new customers.

In July, it beat Airbus and won a firm order of 20 E195-E2 aircraft from U.S.-based Porter, worth $1.56 billion. In the same month, it reached the mark of 12 units of E195-E2 delivered to the regional division of the Dutch company KLM, which consolidated itself as the largest operator of Brazilian jets in Europe.

Just over two weeks ago, it received its first order from a Middle Eastern company, SalamAir. The firm order for six E195-E2s, with purchase rights for another six jets, drew attention because, until then, Oman’s low-cost airline only flown Airbus aircraft.

“Although it is an order of moderate size, it signals that customers flying Airbus are also studying Embraer models,” Itaú BBA analysts Daniel Gasparete, Gabriel Rezende, and Luiz Capistrano wrote in a report earlier this month. Half of the order, valued at $935 million, is expected to be included in the third quarter backlog – in June, the company’s firm order backlog stood at $17.8 billion. In the first half of the year, five E195-E2s were delivered, three of them between April and June.

On Thursday, the Brazilian company said that one of the world’s main travel companies, the European TUI, chose the E195-E2 to expand its fleet, which highlights the model’s versatility. The group will receive three aircraft through a leasing agreement with AerCap and will incorporate them into the Belgian operation.

One of the main advantages of the E2 is the 25% reduction in fuel consumption per seat compared to its first generation. In addition, it is 50% less noisy than others in its class.

Embraer estimates that the global demand for new aircraft of up to 150 seats in the next 20 years will be 10,950 units, of which 8,670 are jets and 2,280 turboprops, with a market value of $650 billion.

In a report presented during the Farnborough International Airshow, the company projected that world demand for air travel, measured in revenue passenger kilometers (RPK), will grow at 3.2% per year (considering the compound annual growth rate, CAGR) through 2041, slightly below the 3.3% rate estimated a year earlier because of the short-term slowdown in the global economy, lingering effects of the Covid-19 pandemic – considered as a region, China remains in the bottom in terms of flight resumption – and the Russia-Ukraine war.

In the battle for new orders, the Embraer E2 jets also suffered some defeats, as in the choice of Australia’s Qantas for up to 134 of Airbus’s A220 and A320neo aircraft instead of Brazilian models or Boeing’s 737 Max. Even so, the Brazilian company managed to get “dangerously” close to its rivals in the smaller segments.

In October, Embraer shares went up 7.6%. In the year, however, it is down nearly 50% after gaining almost 200% in 2021.

*By Stella Fontes — São Paulo

Source: Valor International

https://valorinternational.globo.com/