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.
Reuters
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

China’s Influence Grows With New Infrastructure Bank

Multibillion-dollar China-backed and BRICS-supported Asian Infrastructure Investment Bank seen as possible challenger to such lenders as IMF, World Bank More

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

Rabbi Michel Serfaty makes the rounds in his friendship bus to encourage dialogue and break down barriers between the two groups More

Post-deal Iran Leaders Need 'Economic Momentum' to Solidify

Economists say deal could inject more than $100 billion into coffers - not enough to entirely rescue ailing economy - but maybe adequate to create 'economic momentum' More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
US Gay Marriage Ruling Yields Real-life Impacti
X
Michael Bowman
June 28, 2015 10:05 PM
Friday’s landmark Supreme Court decision legalizing same-sex marriage throughout the United States is an outcome few thought possible just years ago, and shows a nation that increasingly tolerates and even celebrates the hopes and aspirations of gay people. VOA’s Michael Bowman spoke to a same-sex couple that will benefit from the high court ruling, and to a Christian scholar who is apprehensive about its potential consequences for America’s faith community.
Video

Video US Gay Marriage Ruling Yields Real-life Impact

Friday’s landmark Supreme Court decision legalizing same-sex marriage throughout the United States is an outcome few thought possible just years ago, and shows a nation that increasingly tolerates and even celebrates the hopes and aspirations of gay people. VOA’s Michael Bowman spoke to a same-sex couple that will benefit from the high court ruling, and to a Christian scholar who is apprehensive about its potential consequences for America’s faith community.
Video

Video Syrians Flee IS Advance in Hasaka

The Syrian government said Monday it has taken back one of several districts in Hasaka overrun by Islamic State militants. But continued fighting elsewhere in the northern city has forced thousands of civilians from their homes. In this report narrated by Bill Rodgers, VOA Kurdish Service reporter Zana Omer describes the scene in Amouda, where some of the displaced are taking refuge.
Video

Video Rabbi Hits Road to Heal Jewish-Muslim Relations in France

France is on high alert after last week's terrorist attack near the city Lyon, just six months after deadly Paris shootings. The attack have added new tensions to relations between French Jews and Muslims. France’s Jewish and Muslim communities also share a common heritage, though, and as far as one French rabbi is concerned, they are destined to be friends. From the Paris suburb of La Courneuve, Lisa Bryant reports about Rabbi Michel Serfaty and his friendship bus.
Video

Video S. Korea Christians Protest Gay Rights Festival

The U.S. Supreme Court decision mandating marriage equality nationwide has energized gay rights supporters around the world. Gay rights remain a highly contentious issue in a key U.S. ally, South Korea, where police did a deft job Sunday of preventing potential clashes between Christian protesters and gay activists. Kurt Achin reports from Seoul.
Video

Video Saudi Leaks Expose ‘Checkbook Diplomacy’ In Battle With Iran

Saudi Arabia’s willingness to wield its oil money on the global diplomatic stage appears to have been laid bare, after the website WikiLeaks published tens of thousands of leaked cables from Riyadh’s Ministry of Foreign Affairs. VOA's Henry Ridgwell reports.
Video

Video Nubians in Kenya Face Land Challenges

East Africa's ethnic Nubians have a rich cultural history that dates back thousands of years, but in Kenya they are facing hardships, including the loss of lands they have lived on for generations. They say the government has reneged on its pledge to award them title deeds for the plots. VOA's Lenny Ruvaga reports.
Video

Video Syrian Refugees Return to Tal Abyad

Syrian refugees in Turkey confirm they left their hometown of Tal Abyad because of intense fighting and coalition airstrikes, not because Kurdish fighters were engaged in ethnic cleansing, as some Turkish officials charged. VOA Kurdish Service reporter Zana Omer, in Tal Abyad, finds that civilians coming back to the town agree, as we hear in this report narrated by Roger Wilkison.
Video

Video Military Experts Question New Russian Tank Capabilities

Russia has been showing off its new tank design – the Armata T-14. Designers claim it is 20 years ahead of current Western designs - and driving it feels like playing a computer game. But military analysts question those assertions, and warn the cost could be too heavy a burden for Russia’s struggling economy. Henry Ridgwell reports.
Video

Video In Kenya, Police Said to Shoot First, Ask Questions Later

An organization that documents torture and extrajudicial killings says Kenyan police were responsible for 1,252 shooting deaths in five cities, including Nairobi, between 2009 and 2014, representing 67 percent of all gun deaths in the areas reviewed. Gabe Joselow has more from Nairobi.
Video

Video In Syrian Crisis, Social Media Offer Small Comforts

Za’atari, a makeshift city in Jordan, may be the only Syrian refugee camp to tweet its activities, in an effort to keep donors motivated as the war in Syria intensifies and the humanitarian crisis deepens. Inside the camp, families say mobile phone applications help hold together families that are physically torn apart. VOA’s Heather Murdock reports.
Video

Video Chemical-Sniffing Technology Fights Australia's Graffiti Vandals

Cities and towns all over the world spend huge amounts of resources battling graffiti writers who deface buildings, public transport vehicles and even monuments. Authorities in Sydney, Australia, hope a new chemical-sniffing technology finally will stop vandals from scribbling on walls in the passenger areas of commuter trains. VOA’s George Putic has more.
Video

Video Cambodia Struggling to Curb Child Labor

Earlier this year a United Nations report found 10 percent of Cambodian children aged 7-14 are working – one of the highest rates in the region – and said one in four children in that age bracket are forced to quit school to help their families. Although the child labor rate has dropped over the past decade, Cambodia has a lot more to do – including keeping more children in school. Robert Carmichael reports for VOA from Phnom Penh.

VOA Blogs

World Currencies

EUR
USD
0.8926
JPY
USD
123.71
GBP
USD
0.6358
CAD
USD
1.2364
INR
USD
63.600

Rates may not be current.