Embraer sees opportunities in the post-pandemic era
Planemaker believes that the drop in passenger demand will enhance the role of jets with a capacity between 70 and 150 seats, where the E-Jet family fits
Far from seeing a bright side in the terrible coronavirus pandemic, the changes that are expected to affect the air transport market could benefit Embraer’s jets. The drop in demand on domestic and short-haul routes has already motivated several airlines to use smaller aircraft. A sign of this was shown by the Cirium consulting company recently, which revealed that 45% of the planes in service offered 70 to 150 seats, precisely the niche where Embraer offers its models.
The proportion is even higher in the US, a market where the Brazilian manufacturer has a wide fleet of E-Jet family aircraft. In an article on its website, Embraer highlighted the slogan of its jets: “The term ‘right-sized’ has never been more appropriate. There is still a long way to go before we can claim victory over the crises but, as the headwinds ease, airlines with right-sized aircraft will recover faster and stronger.”
Large and inefficient aircraft
This movement in air passenger traffic has been noted with more evidence on long-haul routes, where very large aircraft such as the Airbus A380 and Boeing 747 are being withdrawn from service. Even some twin-engine aircraft that were once economically viable are now retired.
If this trend is really confirmed, it will be a major inversion in the values of commercial aviation in recent years, which sought to offer narrowbodies aircraft with a great offer of seats like the A321 or even the 737-800, with a capacity between 180 and 240 seats.
By chance, Embraer is currently in an extremely comfortable position on the market between 70 and 150 seats. Its first generation E175 model continues to attract a lot of orders mainly from US airlines and has no competitor since Bombardier abandoned the segment and Mitsubishi gave up on developing the SpaceJet M100.
Between 100 and 150 seats, the Brazilian company has a strong opponent, Airbus, which took over the Bombardier C Series and renamed them as A220. But the new generation jet is an expensive product and has more orders in the A220-300 variant, which can carry between 120 and 160 passengers.
In the used aircraft market, Embraer once again stands out, with more than 1,500 aircraft in service while the A220 had only 113 units delivered. Despite this, airframer’s financial situation is not comfortable. After seeing the joint venture with Boeing fail and its shares lose value, Embraer has applied for a loan from the Brazilian government to maintain its operations until the market recovers and, who knows, it may not start a new phase of growth.[DISPLAY_ULTIMATE_SOCIAL_ICONS]