Embraer sees recent Asia-Pacific commitments to E-Jets as a major turning point for its prospects in the region.
“For many years Embraer struggled to penetrate the Asian market,” says Raul Villaron, vice president Asia-Pacific at Embraer, speaking to FlightGlobal at Australia’s Avalon Airshow.
Embraer entered the show on a high note. On 27 February Australia’s Alliance Air said it will acquire 30 Embraer E190s through a sale-and-purchase arrangement with Irish lessor AerCap, with first deliveries starting in September. Ultimately this will bring the carrier’s Embraer fleet to over 60 examples.
A smaller – but arguably more important – commitment emerged in mid-February, when Singapore low-cost carrier Scoot announced it will take nine Embraer E190-E2s from lessor Azorra, making it Southeast Asia’s first E2 family operator.
“We have aircraft flying with all major airlines in Europe, all major airlines in the US, and important airlines fly them in Africa and the Middle East,” says Villaron. “In Asia we were strong in Australia and Japan, but penetrating Southeast Asia and South Asia was a challenge.”
He contends that the main driver for growth South and Southeast Asia have been low-cost carriers who tend to fixate on single types of larger aircraft.
“The model before the pandemic was single fleet type, the biggest aircraft you can get with the lowest seat cost, and you offer the lowest fares possible. “
He feels, however, that the market is starting to change and mature as air travel moves beyond the coronavirus pandemic. Supply chains have been disrupted, causing companies to create supply chains closer to their headquarters - which lends itself to shorter flights on regional aircraft.
In addition, people working from home can move to smaller cities.
Says Villaron: “Those people who have to go to headquarters from time to time will travel more. Fares are also higher, so [airlines] can support different types of aircraft.”
Moreover, the E2 generation has superior seat costs to the previous E1 generation.
“The most significant change is Embraer having a product that has a cost per seat that is comparable to the A320 and 737, whereas before we didn’t have that.
On the topic of airport charges being the same for E-Jets and larger narrowbodies, Villaron says these costs are negligible against items such as fuel burn and maintenance.
Villaron also notes that a number of markets in Southeast Asia are not served owing to various airport restrictions. These include leisure destinations such as Vietnam’s Con Dao Island and Thailand’s Koh Samui.
“There are several airports in Southeast Asia that A220, A320, and the 737 cannot fly too because of [aircraft weight] and the strength of the runway. There are also other restrictions such as runway length.”
Villaron also holds high hopes for Kuala Lumpur’s Subang Airport, which is going to be reopened to jet traffic. He foresees it filling a role to London’s City Airport, namely premium traffic flying on smaller aircraft, while Kuala Lumpur International Airport will remain the main hub.
Of Alliance’s commitment, Villaron had this to add: “Alliance helps Embraer become a stronger company in the region. When other airlines look to get into E-jets, it’s easier because there is training, maintenance, engineers, and pilots.”
