GUY NORRIS / SAO JOSE DOS CAMPOS
Will the introduction of its Phenom 100 very light jet and 300 light jet help Embraer achieve its goal of being a major business aviation player within 10 years?
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But can the same be said for Embraer’s bold venture into the business jet market? It may be a little early to tell, but the signs are that Embraer has again got its plans right. Having dipped its toe in the corporate waters with the Legacy, a business jet derivative of the ERJ-135 regional jet family that was launched into service in 2002, the company’s focus sharpened in 2004 on studies of all-new designs in the much smaller very light (VLJ) and light jet classes. By 2005, with its traditional 50-seat regional jet market on the wane and the business jet market booming, the writing was on the wall for Embraer’s strategists. “Last year it was a turning point for us,” says senior vice-president for executive aviation Luis Carlos Affonso. The company launched the Phenom 100 VLJ and 300 light jet projects in May last year and “we decided to be a major player in the business aviation market within 10 years”.
In hindsight the decision was inevitable as Embraer could not ignore the dramatic growth of the business aviation market, which in 2005 saw a 27% increase in jet deliveries worldwide. Its research indicates this growth is being fuelled largely by the fact that “premium” passengers are being “underserved” by the airlines, says Affonso. “This allows for the appearance of new models because there is demand, and the industry is moving to tap this new demand.” Embraer believes this will ultimately manifest itself in the form of 9,700 new aircraft worth $144 billion over the next 10 years – a significantly higher number than the $130-133 billion forecast by the company in 2005.
To tap more of this beyond the VLJ, light and super mid-size markets, Affonso says Embraer is “studying a mid-light jet and a mid-size aircraft below the Legacy 600. We are also analysing the possibility of launching a business jet derivative of the 170/190 and analysing another possible family in the ultra-long-range market.” The company is bankrolling its investment in business aviation to the tune of $235 million through 2009 and hopes the new sector will account for 20% of total revenues within a decade, versus 7% today.
Having spent $1 billion developing the E-170/190 airliner families, Affonso says the current investment in business jets “will go up since our vision is to approve other projects and to increase production, as well as invest in service and training centres”. Affonso says Embraer has “not yet decided what to do”, but adds: “I expect this year we will announce something in one of the segments.”
But Affonso is no fool and, like his company, takes nothing for granted. Aware that he may be making this sound all a bit easy, Affonso explains: “We have pretty much fulfilled all the regional [market], and decided we could not compete directly with Boeing and Airbus, and that our competencies developed over the past years can be applied to these executive jets. But we know this business is different, and we have to do more than launch new products.” To support the two products launched last November, the Phenom 100 VLJ and 300 light jet, Embraer has therefore created an all-new Executive Aviation business unit headed by Affonso, who reports to company president and chief executive Mauricio Botelho. The new unit is divided into five traditional segments: sales, contracts, market intelligence, programme management and customer support.
A raft of new support products, or what Embraer calls “integrated solutions”, are being developed within this structure, and include training programmes for first-time jet pilots, new support and total care plans, extensive service centres, aircraft exchange services, third-party financing packages as well as a series of proposed fixed-base ooperation (FBO) and aircraft-management partnerships. “We will not become a broker or an FBO network or a financier, but have partners to help us leverage our business,” says Affonso.
Legacy base
Underpinning the whole strategy is the continuing success of the Legacy 600, 71 examples of which are now flying in 17 countries. Although 32 are stabled in the USA, 45% of the Legacy fleet is flying in Europe, Africa and the Middle East. Deliveries are on the rise, with as many as 30 due for delivery in 2006, compared with 20 in 2005, 13 in 2004 and 2003, and 10 in the first year of full production in 2002. The deliveries in 2006 represent 15% of the super mid-size category market, which Embraer expects to hold at roughly the same level between now and 2015. The Legacy 600 development map includes electronic flight bag, an improved weather radar antenna, better cabin entertainment systems, LED lighting, enhancements to its voluminous baggage compartment and provision for an as-yet unspecified enhanced vision system. The new product focus is on the Phenom 100 and 300. The company has completed the joint definition phase of the Phenom 100, and is now into initial detailed design. First metal is to be cut in June, with subassembly work beginning around December. Final assembly is set to start late in the first quarter of 2007 with first flight around June that year. Entry into service is due in mid-2008.
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| The Phenom 100's cross section, revealed in this Catia image, was widened later in the design stage with the introduction of the " Oval Lite" section |
The Phenom 300 follows close behind, with certification and service entry around one year later. The Phenom 100, with a revised “oval lite” non-circular cross-section and a 1.27m3 (45ft3) main baggage compartment, is aimed at Cessna’s Citation Mustang and CJ1 entry-level jets rather than the Eclipse 500. “This delivers the same value as the CJ1+ at a very different price [around $4.2 million against $2.85 million – the price of the Phenom 100 from 1 June],” says Affonso, who adds the small jet is also priced lower than some best-selling turboprops like the Beechcraft King Air C90. To bolster its chances of clinching major air-taxi orders, Embraer has also designed it with a structural life of 35,000 cycles, or roughly double that of most of the current designs in the category. Although Embraer does not plan to reveal the Phenom order backlog until later this year, the market appears to be reacting positively. As a result, Embraer is studying a faster production rate ramp-up for the Phenom 100 to provide more delivery slots before 2010.
Under current assembly plans the Phenom is already sold out through 2009 and well into the following year. “Our business plan called for 100 aircraft per year between the two models, but we have already started to study increasing that from 2009,” says Affonso. The study will almost certainly lead to expansion of its planned VLJ final assembly plant in Gavião Peixoto.
Suppliers named to the Phenom 100 so far include Garmin, B/E Aerospace, Pratt & Whitney Canada, Eaton Aerospace, Zodiac, BMW Group Designworks and electrical generation system supplier AI.
The unexpected review of the production rate has been sparked largely by interest in the Phenom from outside the USA. “When we did the business plan we believed it would be a US market, but we are pleasantly surprised by the reaction in Europe,” adds Affonso.
Sweet spot
Plans for the Phenom 300 are meanwhile moving ahead, with joint definition due for completion in the next two months. The aircraft, aimed to compete with Cessna’s CJ2+, CJ3, Bravo, Encore+ and Raytheon’s Beechcraft Premier IA and Hawker 400XP, is being designed to hit what Embraer describes as the “sweet spot”. “We want it to be ‘best in class’ and, being a totally new design, high speed [MMO 0.78,high-speed cruise 450kt/830km/h] and long range [3,330km/1,800nm], as well the largest baggage compartment,” says Affonso.
Designed for high utilisation, lower direct operating costs ($700/flight hour) and equipped with health monitoring, the aircraft will feature an externally serviced lavatory and a datalink system from service entry. The datalink is expected to be introduced and upgraded in three phases, beginning with a downloadable “gatelink” capability. This will cover engine trend monitoring, line replaceable unit failure signals, aircraft log and exceedance functions in the first phase.
The second phase will see the datalink upgraded with air-to-ground capability and expanded to include flight parameters, systems trend monitoring and flightplan updates. Embraer admits the high-speed datalink envisaged for phase three is “still a vision”, but given the company’s track record so far there seems no reason to disbelieve that this feature – as with the rest of its business jet dream – will ultimately become reality.
Source: Flight International
