Brazilian planemaker Embraer sees its future success in Latin America closely tied to the region’s economic prosperity and political stability as its current customers, both in its home country as well as amongst its Latin American neighbors, mull their next metal move.
From Aeromexico in the north to Argentina’s Austral in the south, Embraer currently has 210 aircraft flying with 13 operators in 11 countries. Many of those operators, Embraer says, will be looking to upgrade their fleets in the coming years if they can. In addition, governments in several countries are planning to improve airport infrastructure to make air travel easier for more passengers and to more destinations.
“Depending on the economic growth of the region – we know what’s going on in Ecuador, in Chile, In Argentina, it will depend very likely if they are going to grow or not,” says Reinaldo Krugner, vice-president of sales for Latin America and the Caribbean at the ALTA Leaders Forum which kicked off on Monday.
“The social impact will drive where the economies will be broadening for good or for bad. If people are starving, the government will have to pay attention to other things other than developing new airports, infrastructure and other aspects, despite the fact that aviation is a main [economic] driver.”
Riots in several South American countries including Chile, Ecuador and Bolivia in the past month have resulted in numerous deaths and a spate of flight cancellations due to the violence. On Sunday, Argentina held a contested presidential election which could up-end much of the deregulation which has supported new entrants into commercial aviation in that country since 2018.
“All of the airlines that currently operate the E1 are natural candidates to replace them with E2 due to all of the benefits that this shift can offer,” Krugner says. Maintenance crews are well-versed in the aircraft’s systems, and pilots flying the new jets require just two-and-a-half days of formal training to become certified on the type, he adds.
The E195-E2, the second and largest variant of its E2 family, is slightly longer than the first-generation E195, with a maximum capacity of 146 seats and a range of 4,815km (2,600nm). A fourth-generation fly-by-wire system, new avionics, new wings, a lower fuel burn and a redesigned cabin are some of the innovations that Embraer built into the new E195-E2.
Brazil’s Azul, the manufacturer’s launch customer for the E195-E2, took delivery of its first jet in September, and is looking to build out the domestic market with the aircraft type. Embraer will deliver five more E195-E2s to Azul in 2019, and another 20 in 2020.
Azul’s growth strategy rests upon connecting parts of Brazil that have been traditionally underserved by larger carriers.
“The only airline that is exploring this regional aspect is Azul,” Krugner says. “Azul is pitching that they will move from 105 markets served – almost double of their competitor - to 150. That’s 50% growth but it’s still not enough for the size of a continental country like Brazil.”
“There’s a huge, an immense opportunity for Brazil to develop the network in terms of aviation,” Krugner says, echoing other executives at the ALTA Leaders Forum who are optimistic about the region, generally considered to be underdeveloped in terms of air connectivity. “We are decades behind what we should be,” Krugner says, adding that Embraer is well-positioned and intends to build on that opportunity.
