News / Economy

Planemaker Embraer Sees American Closing Out US Regional Jet Cycle

Private jets are seen at the Embraer headquarters in Sao Jose dos Campos, Brazil, May 14, 2013.
Private jets are seen at the Embraer headquarters in Sao Jose dos Campos, Brazil, May 14, 2013.
Embraer SA, the world's third-largest commercial jet maker, expects just one more big regional jet order as a result of its current U.S. sales campaign, Chief Executive Officer Frederico Curado said in an interview, after the Brazilian planemaker clinched three of four major deals since December.
“After the American Airlines competition, the game is over for a while,” Curado told the Reuters Latin America Investment Summit late on Thursday, reinforcing views that Embraer has come away victorious in the latest round against Canadian rival Bombardier Inc.
Curado said much of the lingering demand for regional jets over the next year or so, which could amount to between 150-250 planes seating up to 76 passengers, is likely to be satisfied by outstanding options in recent contracts.
Embraer booked the lion's share of those contracts over the past six months, with 117 firm orders from United Airlines and regional operators SkyWest Inc and Republic Airways - plus options for an additional 247 jets.
Bombardier's only major U.S. contract in the same period was a December deal with Delta Air Lines for 40 firm orders and 30 options.
Bolstered backlog

Embraer's flurry of new orders this year, worth at least $4.8 billion at list prices, guaranteed stable or growing output of its regional E-Jets in coming years, Curado said, in his first interview since a “milestone” Tuesday order from SkyWest.
Bank of America Merrill Lynch analysts estimate that Embraer's order backlog may rise from a six-year low last year to 16.1 billion Brazilian reais ($78.58 billion) by June -its highest since 2009.
While U.S. demand has concentrated on the smaller E175, due to renegotiated labor contracts for regional airlines, Curado said there is ongoing sales activity for larger models in the E-Jet lineup, despite a slowdown in their traditional markets.
“Europe is facing a tricky economic outlook and the Chinese market for regional aviation has been settling. So at this point we're talking about smaller volumes, but the E190 is the most-sold of the E-Jet family and that should continue,” he said.
Embraer's backlog should continue to grow next year, according to analysts at Brazilian investment bank BTG Pactual, pointing to the outlook for smaller orders from emerging markets and continued demand in North America.
Curado said he expected most demand for jets of around 100 seats to come from fleet renewals over the coming decade, rather than market growth. He mentioned hundreds of aging Fokker 100, McDonnell Douglas DC-9 and Boeing 737-200/300 that will need to be replaced.
While that represents a small slice of airlines' global fleets, Curado said it will remain Embraer's core business, justifying a hefty investment to renew the E-Jet lineup with more fuel-efficient engines, wings and other systems by 2018.
Engineers have been working two years on the specifications of the next generation of planes, Curado said, but the program is still awaiting approval by Embraer's board of directors.
Many analysts expect the formal launch of the next generation next  month at the Paris Air Show, which Curado neither confirmed nor denied.
If Embraer does go ahead with the program, Curado said it could cover development costs using cash flow and debt, with no need to raise new capital.

You May Like

Syrian Rebels Poised for Anti-Russia Collaboration

Forty-one insurgent groups issue joint statement vowing retaliation for Russian air offensives More

Political Maneuver Revives Export-Import Bank's Chances

Parliamentary tactic gets bill out of committee, but it faces opposition in the Senate More

Beijing Warns US on S. China Sea Patrols

Warning follows news reports Thursday that US military is planning to sail warships close to artificial islands Beijing has been aggressively building More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
House Republicans in Chaos as Speaker Favorite Withdrawsi
Jim Malone
October 09, 2015 12:32 AM
The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video House Republicans in Chaos as Speaker Favorite Withdraws

The Republican widely expected to become the next speaker of the House of Representatives shocked his colleagues Thursday by announcing he was withdrawing his candidacy. The decision by Majority Leader Kevin McCarthy means the race to succeed retiring Speaker John Boehner is now wide open. VOA National Correspondent Jim Malone reports.

Video German, US Officials Investigate Volkswagen

German officials have taken steps to restore some of the reputation their car industry has lost after a recent Volkswagen diesel emissions scandal. Authorities have searched Volkswagen headquarters and other locations in an effort to identify the culprits in the creation of software that helps cheat on emission tests. Meanwhile, a group of lawmakers in Washington held a hearing to get to the bottom of the cheating strategy that was first discovered in the United States. Zlatica Hoke reports.

Video Why Are Gun Laws So Hard for Congress to Tackle?

Since taking office, President Barack Obama has spoken out or issued statements about 15 mass shootings. The most recent shooting, in which 10 people were killed at a community college, sparked outrage over the nation's gun laws. But changing those laws isn't as easy as many think. VOA's Carolyn Presutti reports.

Video Hungary Criticized for Handling of Refugees

Amnesty International has accused Hungary of breaking multiple international and European human rights laws in its handling of the refugee crisis. As Henry Ridgwell reports, thousands of migrants and refugees continue to travel through the Balkans to Hungary every day.

Video Iraqi-Kurdish Teachers Vow to Continue Protest

Sixteen people were injured when police used tear gas and rubber bullets to disperse teachers and other public employees who took to the streets in Iraq’s Kurdish north, demanding their salaries from the Kurdish Regional Government (KRG). VOA’s Dilshad Anwar, in Sulaimaniya, caught up with protesting teachers who say they have not been paid for three months. Parke Brewer narrates his report.

Video Syrian Village Community Faces Double Displacement in Lebanon

Driven by war from their village in southwestern Syria, a group of families found shelter in Lebanon, resettling en masse in a half-built university to form one of the biggest settlements of its kind in Lebanon. Three years later, however, they now face being kicked out and dispersed in a country where finding shelter as a refugee can be especially tough. John Owens has more for VOA from the city of Saida, also known as Sidon.

Video Bat Colony: Unusual Tourist Attraction in Texas

The action hero Batman might be everyone’s favorite but real bats hardly get that kind of adoration. Put more than a million of these creatures of the night together and it only evokes images of horror. Sarah Zaman visited the largest urban bat colony in North America to see just how well bat and human get along with each other.

Video Device Shows Promise of Stopping Motion Sickness

It’s a sickening feeling — the dizziness, nausea and vomiting that comes with motion sickness. But a device now being developed could stop motion sickness by suppressing certain signals in the brain. VOA’s Deborah Block reports.

Video Making a Mint

While apples, corn, and cranberries top the list of fall produce in the US, it’s also the time to harvest gum, candy, and toothpaste—or at least the oil that makes them minty fresh. Erika Celeste reports from South Bend, Indiana on the mint harvest.

Video Activists Decry Lagos Slum Demolition

Acting on a court order, authorities in Nigeria demolished a slum last month in the commercial capital, Lagos. But human rights activists say the order was illegal, and the community was razed to make way for a government housing project. Chris Stein has more from Lagos.

Video TPP Agreed, But Faces Stiff Opposition

President Barack Obama promoted the Trans-Pacific Partnership on Tuesday, one day after 12 Pacific Rim nations reached the free trade deal in Atlanta. The controversial pact that would involve about 40 percent of global trade still needs approval by lawmakers in respective countries. Zlatica Hoke reports Obama is facing strong opposition to the deal, including from members of his own party.

Video Ukranian Artist Portrays Putin in an Unusual Way

As Russian President Vladimir Putin was addressing the United Nations in New York last month, he was also being featured in an art exhibition in Washington. It’s not a flattering exhibit. It’s done by a Ukrainian artist in a unique medium. And its creator says it’s not only a work of art - it’s a political statement. VOA’s Tetiana Kharchenko has more.

VOA Blogs

World Currencies


Rates may not be current.