Embraer has its second worst backlog in four years
Planemaker has blank quarter with no orders from its commercial jets while waiting for joint venture with Boeing
Despite the delivery of the first E190-E2 to Helvetic Airlines this week, Embraer has no reason to celebrate. Brazilian planemaker has been bitterly stagnant in the commercial aviation segment for a long time and in the third quarter of 2019 was no different.
Only 17 jets were delivered during this period, of which only two are from the new E2 family, which has attracted few customers. In 18 months of production, the new jets had only eight units delivered, but it is in the volume of orders that the situation seems most dramatic.
The new series, which includes the E175-E2, E190-E2 and E195-E2 models, has 279 orders, 168 firm orders and 111 options. Two years ago, however, this volume was 582 aircraft and has since shrunk, particularly with the hold of 200 E175-E2 because of the limitation imposed by the scope clause prohibiting this aircraft from flying in the US.
The outlook is not worse because the E175-E1, which is shaped to meet the scope clause, continues to sell well. No less than half of Embraer’s backlog refers to this model. By the way, the manufacturer hit in September the second worst backlog in the last two years with only 345 aircraft scheduled for production.
The most critical moment in this regard occurred exactly one year ago when Embraer withdrew Skywest and Trans States orders from its portfolio, leaving only 251 aircraft to be manufactured. Fortunately, the E175-E1 had nearly 150 firm orders during this period and mitigated the situation.
Meanwhile, its natural successor, the E175-E2, remains without a single aircraft ordered, although Embraer claims there are several negotiations in progress.
Waiting for Boeing
The few orders in recent years may have to do with negotiations to form a joint venture with Boeing, which will take over the lead in Embraer’s commercial jet business. Unveiled in December 2017, the partnership was only confirmed in July 2018 and since then the two companies have focused on the legal aspects of the business.
The problem is that the process has been taking a long time and should only be completed sometime in 2020. Meanwhile, potential customers of the E2 jets may be waiting for this outcome to finally understand what the aircraft line will look like in Boeing’s portfolio.
In this sense, the purchase of Bombardier C Series by Airbus had a faster and more effective transition, with the European manufacturer soon incorporating the Canadian jets, renamed as A220. Currently, both versions accumulate 525 orders between firm orders and options.
With the start of operation of the E195-E2, the largest variant of the family, in the Brazilian airline Azul it will be possible to prove its economic advantages announced by Embraer.
The aircraft’s largest customer, the airline has more than 50 units ordered and will be the first to operate it on a large scale. If the jet meets what is expected of it, then possibly its sales will start to increase, either with Embraer alone or with Boeing.[DISPLAY_ULTIMATE_SOCIAL_ICONS]