Embraer has ruled out launching any new aircraft this decade as it zeroes in on maturing research and development studies and building cash reserves.
Speaking during the Brazilian manufacturer’s fourth-quarter results announcement on 27 February, chief executive Francisco Gomes Neto said Embraer was “focusing on delivering the results to 2030 to guarantee cash generation and investing in new technologies to guarantee technical readiness in case we agree to a new product”.
It comes as the company reported record annual revenues and backlog of $6.4 billion and $26.3 billion – up 21% and 40% – in what Neto describes as a “historic year for Embraer”. Adjusted EBIT of $708 million represents an 11.1% margin.
Embraer has a young product line across its three main business divisions of commercial, executive, and military aviation.
Last week, the company, which announced its Pratt & Whitney geared turbofan-powered E2 regional jet line-up 12 years ago, confirmed that the smallest member of the family, the E175-E2, was being “paused” for four more years. The variant, launched at the same time as the E195-E2 and E190-E2, has been stymied by so-called pilot Scope Clause restrictions on its operation in the USA, its biggest market. The original version of the E175 continues to sell strongly.
There had been speculation that Embraer might look to refresh its executive aircraft offering soon. Its Phenom 100 and Phenom 300 light jets entered service in 2008 and 2009 but have been refreshed several times. Its midsize Praetor 500 and Praetor 600 were certificated around a decade ago as the Legacy 450 and Legacy 500 but have also been extensively updated.
But there does not seem to be a market clamour for new products. The Phenom 300E has been the top-selling light jet for the past 13 years and earlier this month the executive jet division was boosted by a record order from US fractional operator Flexjet for 182 Embraer aircraft.
A decade after its first flight, Embraer’s flagship defence product, the C-390 tactical transport, has been gaining momentum with orders from Slovakia and an unnamed customer late last year taking the orderbook to 42. Brazil, Hungary, and Portugal operate the aircraft, with Austria, the Czech Republic, the Netherlands and South Korea awaiting first deliveries, while Sweden has also selected the type without detailing the number required.
Embraer also owns electric vertical take-off and landing developer Eve, which hopes to fly its prototype for the first time this year.
Neto says that, although there are no new aircraft programmes in development, the company is investing heavily in its existing product line, including the E175 and Eve. Embraer is also focusing its R&D on seven “verticals”, he says: autonomous flight, alternative propulsion, airframe competitiveness, passenger experience, cyber, artificial intelligence, and industry 4.0.
Embraer delivered 206 aircraft last year: 73 commercial jets, 130 executive jets, and three C-390s.
In September, it settled a claim with Boeing following the abandoned takeover of Embraer’s commercial aircraft business in 2020, receiving $150 million in compensation from the US manufacturer.
