Brazil’s Embraer Looks 20 Years into the Future and Sees Blue Skies

Brazilian Embraer's Lineage 1000 Brazilian aircraft maker Embraer presented its 20-year forecast of the world demand for 30- to 120-seat commercial jets, and its ten-year forecast for the business aviation market. The announcement was made at the close of the ninth edition of the annual Embraer Day encounter with analysts and investors, organized by the Company and held, this year, on November 6 and 7, in São Jose dos Campos, Brazil.

According to Embraer world air travel demand should grow on an average of 5% per year, from 2009 to 2028. Embraer estimates that the air transportation industry will react positively, after the end of the current economic crisis, and that the long-term growth trend will be maintained.

China should lead the growth in the next 20 years, with an average annual rate of more than 7.5%, followed by the emerging regions of Latin America and Russia & Commonwealth of Independent States (CIS), both at 6% per year. Asia Pacific and Africa will grow about 5%, and the European and North American markets, 4%.

Embraer foresees a global demand of 6,750 jets with a 30- to 120-seat capacity over the next 20 years, which will generate sales of new aircraft totaling US$ 220 billion. Of this total, 2,950 jets should be delivered between 2009 and 2018, and the remaining 3,800 units between 2019 and 2028.

The forecast indicates that the 30- to 60-seat capacity segment will be under pressure, over the next five years, due to the economic crisis and fuel prices, forcing airlines to review their strategies, mainly in the North American environment. The 50-seat regional jet market has achieved maturity, but tends to continue supporting the U.S. and European systems and to contribute to the development of regional aviation in Russia & CIS, Mexico, Africa and South America.

The jets with 61 to 120 seats should continue to help airlines match aircraft capacity to market demand, by right-sizing low load factor narrow-body airplanes that have too many seats. Furthermore, the jets in this segment also tend to be used to substitute older fleets, to expand into new markets, and to aid the natural growth of regional airlines on high demand routes operated by smaller jets, for the purpose of increasing revenues and market share.

Embraer believes that emissions will be one of the main influences on the development of future aircraft. Today, more than 700 units of the 30- to 120-seat fleet are over 20 years old and should soon be replaced, which will result in significant environmental benefits. In this scenario, Embraer's family of E-Jets provides a reduction of as much as 50% in carbon dioxide emissions.

Embraer forecasts a global demand of 11,880 business jets for 2009-2018, which could generate approximately US$ 204 billion in new aircraft deliveries. The new air taxi and branded charter market may add yet another 1,800 to 2,800 jets to the personal and entry level segments for the same period.

Since 2006, the industry has posted consecutive delivery records, largely supported by the growing demand from non-U.S. markets, but deliveries are expected to slow down, in 2009, with a market adjustment in the 2009-2012 period. Despite the reduction in short-term deliveries, long-term sustainable growth is foreseen for the business jet market, due to the return of economic growth, albeit at more conservative levels.

Launched in 2005, the Phenom 100 and Phenom 300 jets are positioned in the entry level and light segments, respectively. The Phenom 100's maiden flight occurred on July 26, 2007, and the model has already accumulated over 1,300 hours of test flights for certification, which is expected by the end of the 2008.

Ten Phenom 100s are expected to be delivered to North American customers this year. The first flight of the Phenom 300 occurred on April 29, 2008. The flight test campaign for certification moves steadily ahead, and is expected to be concluded in the second half of 2009.

In May 2006, the Company launched the Lineage 1000, an ultra-large executive jet based on the platform of the EMBRAER 190 commercial jet. The first airplane took its maiden flight on October 26, 2007. Today, four jets are in the final interior assembly stage. Certification and the first delivery of this model will occur by the end of 2008.

The Legacy 500 midsize and Legacy 450 midlight business jets were launched in May of this year, and should enter service in the second half of 2012 and 2013, respectively. The Legacy 600 continues to increase it market share, currently 15% in the super midsize category, and now has over 150 aircraft operating in 23 countries.

Embraer is investing over US$ 100 million in the infrastructure and organization for customer support and services. In 2008, three new Company-owned service centers were inaugurated in the States of Connecticut, Arizona and Florida, in the United States.

The service network will be comprised of 45 centers, including seven wholly owned facilities. Embraer CAE Training Services (ECTS), a joint venture between Embraer and CAE for training Phenom jet operators, has already completed the instructional program for the first mechanics and customer pilots.

The ECTS training center in Europe, located in the United Kingdom, will begin operations in the first half of 2009. Embraer has also invested in replacement parts inventory and logistics, as well as in expanding its maintenance programs for executive jets. Embraer Executive Care (EEC), a comprehensive by-the-hour maintenance program, is now available to Phenom jet customers.

The acceptance of the Phenom, Legacy and Lineage executive jets, and the continuous progress of their respective development programs has resulted in a current firm order backlog of US$ 7 billion, which is a significant increase over previous years (US$ 4 billion, at the end of 2007, US$ 2 billion, in 2006, and US$ 600 million, in 2005). Firm orders for the Phenom 100 and Phenom 300 stand at over 800 units.

Forecast for 2009

Embraer has revised its estimated aircraft deliveries for 2009, and expects to deliver 270 jets for the commercial aviation, executive aviation and defense and government (state-owned airlines and transportation of government officials) segments. The Company has also released its investments forecast for 2009, totaling US$ 450 million.

Embraer is the world's largest manufacturer of commercial jets up to 120 seats, and one of Brazil's leading exporters. Embraer's headquarters are located in São Jose dos Campos, São Paulo, and it has offices, industrial operations and customer service facilities in Brazil, the United States, France, Portugal, China and Singapore.

Founded in 1969, the Company designs, develops, manufactures and sells aircraft for the Commercial Aviation, Executive Aviation, and Defense and Government segments. The Company also provides after sales support and services to customers worldwide. On September 30, 2008, Embraer had a workforce of 23,745 employees and a firm order backlog of US$ 21.6 billion.

Tags:

Ads

You May Also Like

Truck and building of Frutaflor

Brazilian Shows the Power of Fruit and Flower

After 10 years dedicated to ballet, Paula Regina Dell’Antonio changed the stage for flowers. ...

Brazil’s Hip Accessories Maker Chilli Beans Gets a Shot in Hollywood

Chilli Beans, Brazilian brand of accessories like dark glasses and watches, is looking for ...

Minister Sees 2006 as a Green Year for Brazil

Brazil’s Minister of Agriculture, Roberto Rodrigues, says that with changes in macroeconomic policy and ...

US, China and India Are Priorities for Brazilian Exports in 2009

Those firms from Brazil that have the support of the Brazilian Export and Investment ...

Brazil’s PT Accused of Links to Farc Wins Right to Write Own Version in Veja

Brazil’s ruling party, the PT (Workers Party) had two complaints filed at the Federal ...

Brazil Asked to Vote Less Against Israel in the UN

Brazil and Israel concluded a formal agreement, on Sunday, May 29, that establishes principles ...

Chacrinha and Sílvio Santos: Two Key Names to Understand Brazilians’ Psyche

A huge percentage of the Brazilian population spends Sundays in front of the TV ...

Women are getting a bigger role in Brazilian scientific research

One Third of Brazil’s Scientific Research Is Done by Women

Thirty two percent of the current Brazilian scientific production is made by women. This ...

31% of Brazilian Homes Still Lack Sewage Collection

According to Brazil’s 2004 Household Survey (Pesquisa Nacional por Amostra de DomicÀ­lios 2004) (PNAD-2004), ...

Brazilian Indians: What FUNAI Won’t Tell You

Tours with visits to Indian villages are common in the Brazilian Amazon. Within the ...