Brazil’s Aircraft Maker Embraer Sees Tough 2010 Ahead, But Vows No Investment Cuts

Embraer E-170 Embraer, Brazil's aircraft manufacturing company, should deliver 19 aircraft of the E-Jets family to the Arab market in the next two years. Presently, the company already has 35 commercial jets operating in the Middle East, with seat capacity ranging from 70 to 122.

The new aircraft are five E-170s for the Egyptian company Egyptair, nine E-190s for the National Air Services (NAS), from Saudi Arabia, and five E-175s for Oman Air, from Oman. The jets that have already been delivered to the Arab countries are 15 E-170 for Saudi Arabian, five E-195 and two E-175 for Royal Jordanian, seven E-170 for Egyptair and two E-195 and four E-190 for NAS.

According to Embraer market projections, over the next 20 years 6,750 aircraft will be delivered, ranging from 30 to 120 seats, in several regions of the world, and the forecast for the Middle East alone is 210 aircraft.

According to the Embraer Market Intelligence vice president, Luiz Sergio Chiessi, the demand for air transport in the Middle East has grown at a rate of 15% over the last five years, whereas the global rate is 5%.

With regard to executive jets, Embraer has 20 Legacy 600 jets in Dubai, in Kuwait and in Saudi Arabia, and according to the company the fleet is growing. "We are investing heavily in the executive line," said Chiessi. In 2012 and 2013, two new jets are going to be released, the Legacy 450 and Legacy 500, which are currently being designed.

The Brazilian company's revenues this year should total US$ 5.5 billion. In Brazil, sales reached a record high in 2009, with US$ 500 million, representing a 10% share of the company's total revenues, as against 4% last year.

To the president of Embraer, Frederico Fleury Curado, the year of 2010 will be "as hard or harder" than 2009, but the executive guaranteed that there will be no cost reduction at the company nor reduction of investment in technology. Investment should be maintained at US$ 350 million.

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