PAUL LEWIS / WASHINGTON DC
Manufacturer has asked suppliers to raise production as current orders mop up capacity
Embraer has asked its 170/190 partner suppliers to look at increasing the output of airframe substructures and systems to support a possible hike in production of the new large regional jet next year in the wake of US Airways' $2.1 billion order for 85 aircraft.
The Brazilian company plans to deliver 42 70-seat 170 and 78-seat 175 aircraft in 2004, representing around 31% of its projected regional and corporate jet output next year. The US Airways deal, together with delivery commitments to Swiss and LOT, leaves little if any spare production capacity to fulfil new airline orders in the next 18 months.
US Airways deliveries will begin in November at the rate of three aircraft a month, with the bulk of the order representing 35 to 36 aircraft due to be handed over in 2004. Deliveries will reduce to two a month in 2005 before the last of 85 aircraft is delivered in September 2006. The order includes 30 of the 50 170s previously ordered by GE Capital Aviation Services. The airline anticipates switching about half of its orders to the 175 once it is certified next year.
Embraer plans to ramp up 170/190 family production to a maximum of 84 aircraft a year over the next 30 months, but chief executive Mauricio Botelho says the company is in talks with partners to accelerate this. US Airways has options on another 50 170/175s, while Embraer is competing for other potentially large regional jet orders including a planned combined Star Alliance buy led by Lufthansa and All Nippon Airways.
The US Airways order increases the 170/190-series order backlog to 149 aircraft, with the first four for Swiss due for delivery in 2004 along with some of LOT's 10 aircraft, plus another 189 options. The new deal increases the value of Embraer's total order backlog from $7.9 billion to $9.3 billion even after discounting Swiss's recent halving of its order to 30 aircraft.
Embraer, meanwhile, has reported delivering 23 ERJ-145 family and Legacy aircraft in the first quarter of the year, down on the 30 in the first three months of 2002. Revenues fell 12% to $489 million due to the continuing weakness in commercial aircraft deliveries, only partially offset by a 38% hike in defence revenue. Profit topped $44 million, down on $68 million in the first quarter of last year.
Source: Flight International
