By Elizabeth Broomhall
Aircraft maker says economic challenges, lack of demand continue to impact industry
Brazilian aircraft manufacturer Embraer is preparing for modest growth in 2012, citing global economic challenges and a lack of demand for executive jets as the main reasons for a recent slowdown.
The world's top regional plane maker, which recorded a slim third-quarter net loss of 200,000 reais ($115,000), expects most business to come from the commercial aviation side, and from emerging markets such as the Middle East.
“Results were pretty much in line with last year, we are [about] even,” Paulo Cesar Souza e Silva, president of Embraer's commercial aviation unit told Arabian Business at the Dubai Air Show.
“[Growth next year] is still to be seen, emerging markets are still doing well, [but] monetary economies are suffering... [such as] Europe and the US.
“Commercial aviation represents about 65 percent of the total [revenues], business jets are 15 percent. Business jets as a whole are not doing well around the world. But it should be over within the next 2-3 years. So I think for commercial aviation we should see some growth next year, but not big numbers.”
Between now and 2030, Silva said the firm was anticipating demand for 310 jets in the 60-120 passenger range, valued at around $14bn.
He added that the firm was finalising its latest orders, with a view to announcing them towards the end of the month.
At the same time, the firm was also focusing on delivering the remaining planes in its existing orderbook.
“We have already delivered 56 out of the 65 [planes on order in the Middle East],” Silva said. “We have two to Oman Air and seven to NAS to be delivered from 2012 to 2015. We have up to 1100 in terms of total [global] order book, we have delivered about 800.”
Other ventures for the company include upgrading the engine in its E-jet planes, after it scrapped plans to design a bigger, new family of aircraft.
The former plans, which would have seen Embraer compete with rival manufacturers, required too large an investment at that stage, Silva said.
The new engine will be completed by 2018, but it is still unknown which and how many of Embraer’s four E-jets will benefit from the upgrade.
The firm is in talks with Pratt & Whitney, CFM and Rolls-Royce, and is toying with the possibility giving the E-jet a new wing.