Embraer announces orders and commitments for the E2 family from two undisclosed customers

Eleanor Steed
By Eleanor Steed June 21, 2017 12:10

Embraer announces orders and commitments for the E2 family from two undisclosed customers

Embraer has announced firm orders and commitments from undisclosed customers for the E2 family. The firm order consists of ten E195-E2´s, with an additional ten purchase rights for the E190-E2. The firm order has a value of US$666 million, based on Embraer’s current list prices and will be included in Embraer’s 2017 second-quarter backlog.

Embraer also signed a commitment with an undisclosed customer to purchase 20 E190-E2s. The agreement is subject to final documentation by the customer. The value of this order is US$1.182 billion based on Embraer´s current list prices.

With these announcements, the E2s have accrued 285 firm orders, in addition to 445 options, purchase rights, and letters-of-intent, totaling 730 commitments from airline customers and leasing companies.

Embraer projects market demand for 6,400 new jet deliveries in the 70-130+ seat segment over the next 20 years.

According to the latest Market Outlook, Embraer projects a steady market demand for 6,400 new jets in the 70-130+ seat capacity category (2,280 units in the 70-90 seat segment and 4,120 units in the 90-130+ seat segment), worth US$300 billion, by 2036.

The 70-130+ seat jet world fleet-in-service will increase from 2,700 aircraft in 2016 to 6,710 by 2036, the fastest growing segment among all aircraft seat capacities. Market growth will drive 63% of total demand and the remaining 37% will be delivered to replace ageing aircraft.

Whilst region-specific outlooks vary considerably, the underlying drivers to sustain the projected market demand for jets in the 70-130+ seat capacity category remain intact, from feeding complex bank structures at major hubs to pioneering new markets and complement narrow-body aircraft operation.

Fleet optimization is critical in the vicissitudes of business cycles, and a rationalized fleet does not necessarily signify an optimized one. Right-sized aircraft call for a new smarter approach. Greater control in matching aircraft capacity to market demand prevents the erosion of unit revenues and provides competitive cost structure.

The E195-E2, for example, will provide an attractive proposition with much lower trip costs and comparable seat-mile costs to than its large narrow-body counterparts, while combining growth and higher returns with the opportunity to increase unit revenue with a right-sized aircraft.

“The airline industry is notoriously known for its boom and bust cycles. Better seat inventory control allows a continuous search for higher profits and efficiency. The ability to shift back towards revenue unit growth, instead of aggressive capacity expansion, is crucial”, said John Slattery, President & CEO, Embraer Commercial Aviation.

Jets in the 70-130+ seat capacity category are one of the main pillars of business sustainability. As the most efficient single-aisle family of aircraft, the E-Jets E2 is perfectly positioned to keep Embraer as the market leader in the segment and maximize profitability for both airlines and leasing companies.

Image: Embraer
Eleanor Steed
By Eleanor Steed June 21, 2017 12:10