Embraer Commercial Aviation chief executive Arjan Meijer expects another year of double-digit growth following the Brazilian manufacturer’s robust delivery performance in 2023 during which it shipped 64 regional jets.
While this marked a 12% increase in commercial aircraft deliveries from the 57 aircraft Embraer handed over in 2022, it was one unit shy of the lower end of its guidance last year of 65-70 deliveries.
Speaking to FlightGlobal on the sidelines of the Airline Economics Growth Frontiers event in Dublin on 29 January – prior to the delivery numbers being disclosed a day later – Meijer pointed to the progress Embraer is making towards returning to pre-pandemic levels.
”We are now showing year-on-year double-digit growth again to get back to 2019 levels,” he says, with Embraer’s revenue in 2023 “roughly” on a par with that achieved in 2019. That, he says, is ”great news”.
”We still see commercial is around 70% of where we were before the crisis, so there is the potential of Embraer growing further if we get our whole supply chain back on track – which is going well.
”I think we could have delivered more aircraft but we are at least very pleased that we got the engines to deliver in good numbers in 2023 compared to 2022. And in 2024 we will be doing the same compared to 2023, so keep growing.”
Embraer has not yet disclosed a commercial aircraft delivery target for 2024. The manufacturer delivered 89 E-Jets in pre-pandemic 2019 and 90 in 2018, and last achieved triple-figures – at 101 aircraft – in 2017.
”We have a process with suppliers that carefully matches what we commit to the market. That’s why I’m saying we could have delivered more, but in the planning cycle we have to live with the restrictions that we have,” Meijer says. “Are we out of the woods? No. We see it improving, but we still have some late deliveries of some supplies to the line.
”I think during this year we will further improve that. I think the guidance we will give to the markets will be based on what supplies can support us. When I say double-digit growth, I am confident that the suppliers will be able to follow that and we have active discussions to make sure we hit the numbers.”
A year-on-year increase of 10% would see deliveries rise to around 71 units, while a 15% increase would mean 74 shipments.
Embraer has also been impacted by Pratt & Whitney’s wider recalling of geared turbofan engines for inspections and replacement of high-pressure turbine and compressor disks, a result of potential defects due to a powder-metal manufacturing problem. The E190-E2 and E195-E2 are powered by PW1900Gs.
”The engines that are coming out of the factory today are good to go, they have all the powder elements checked and also the engines delivered in 2023,” says Meijer. ”There is a tail of older aircraft that have to go back to the shop. There will not be more shop visits but some may need to be accelerated a bit.
”There will be impact on the fleet this year and maybe next year with some early shop visits, but the impact is a lot less than on other Pratt-powered platforms because we have a smaller affected group. Our tail is shorter, the technology level of our aircraft across the board is higher, and the wear and tear on the engine is lower because the aircraft is lighter.”
SALES MARKET OPPORTUNITIES
In November, Embraer secured a follow-on order for 25 E195-E2s from Canadian regional carrier Porter Airlines – after an earlier commitment for 50 of the type – and Meijer sees opportunity from the type being deployed to destinations south of the border.
”They are now starting to fly quite extensively into the US, so airlines are starting to see… the range of the aircraft. And we believe, although the initial focus with the pilot shortage in the US market has been adding some bigger capacity narrowbodies, there is an emerging gap between the bigger narrowbodies and the regional fleet that needs addressing in the future,” he says.
”That is going to take a bit of time, but we are very confident with the E2 now in the US market, we will get more conversations in the North American market.”
Thus far it has been smaller E175s that have held sway in the USA due to scope-clause restrictions.
”We’ve really seen orders coming back on the E175,” he says. “That’s an aircraft that fits very nicely in scope, the only aircraft that really sells in that segment.
”We saw a couple of soft years because of pilot availability. That’s now solving itself so we see aircraft going back in and I expect more demand there to keep filling and expanding.”
In Asia-Pacific, Embraer will receive a boost with the imminent launch of E2 operations by Singapore Airlines unit Scoot. The jets will seat 112 passengers in a single-class layout – the smallest aircraft in the SIA Group’s fleet.
In support of the Scoot launch, Embraer has secured Singapore certification for the E2 – as it also has over the past 18 months from China. Meijer sees sales opportunities here too, but says this will take longer to come to fruition.
”Are we out of the woods? No. We see it improving”
”We are working hard, we have a lot of engagements, but we need to be patient,” he says. ”I think the E2 for China is a great aircraft, to connect greater China from west to east, but also to connect hot and high China – a lot of high [altitude] airports where the E190-E2 is a great aircraft. We believe it could very wll complement the Chinese product line – ARJ21 on the bottom, C919 at the top and the E2 fits nicely in the middle.”
Also on the near-term horizon is development of its passenger-to-freighter (P2F) conversion programme, after unvelling the first E190F at a ceremony at the end of November.
”We are now finalising that aircraft,” says Meijer. ”First flight I think will happen first half of this year, certification after that. That’s the E190. And we are looking at doing the E195 freighter as a second step.
”When we launched it, it was a strong market. We see now the cargo market is a bit soft, but I think you have to build in the time where demand is a bit slow, because when demand comes up we need to be ready. We see a huge demand for this segment. There’s really nothing between ATRs and bigger narrowbodies, so we are very confident.”
Further ahead though, Embraer is biding its time on future aircraft development, having at the end of 2022 paused the launch of a new turboprop due to engine limitations. At the same time, it has been working on its Energia programme, which is looking at new propulsion technologies for aircraft with up to 50 seats.
”We have said to the market we don’t have an engine for that [turboprop] aircraft at the moment. So as long as don’t have it, we pause it. We use the time in the meantime to really work on our Energia models, and those two could blend together.
”We have always said if we want to do a turboprop, we want to have it in the market by 2030,” he adds. ”We have basically passed that point. We could still do it later, but it really depends how we progress on the Energia side. So we are looking at electric, hybrid-electric and hydrogen solutions. We will take a bit of time to think about our next step in that segment.”
