Embraer is a global aerospace company headquartered in São Paulo, Brazil. It was founded in 1969 and is now the third-largest producer of civil aircraft in the world, known for its design, development, and manufacturing of smaller 150-seat bodies.
You've been at Embraer for close to 25 years now. How important is the aviation industry to Brazil’s economic position and influence on the world stage?
As a growing economy, the aviation industry is extremely important for Brazil, especially regarding high-technology products. The government has been instrumental in developing relationships with other countries and Embraer plays a significant role in this regard, helping drive the growth of the aviation sector both within and outside Brazil while contributing to the country's GDP and broader economic growth.
Embraer is known for its niche in smaller aircraft manufacturing. Given that your competitors, Airbus and Boeing, are receiving thousands of orders for larger aircraft - the 737 and the A320 - do you have plans to capitalize on this demand and develop a rival aircraft?
For now, we are concentrating our efforts on our core market, which is the segment of up to 150 seats. This has been our focus since Embraer was founded in 1969. Our main products in commercial aviation include the E175, E190, E195, and E2 models and we are seeing increasing interest in these products as the market develops more into secondary and tertiary routes.
Post-pandemic, many people moved out of the big city centers; in response, many airlines are looking to develop smaller markets. We are well-positioned to serve these needs. Additionally, we have brand-new products in all of our business divisions, such as the Praetor 600 in executive aviation and the C-390 in defense. We like to say, we are in harvesting mode.
Can you tell us about the rising demand for more regional aviation, and what this means for the move towards more sustainable aviation practices?
When we think about climate change caused by human activity, the bigger the aircraft, the more combustion, and the larger the CO2 emissions. So from a sustainability point of view, it’s better to use what we call ‘the right-sized aircraft’ for a given market, to avoid unnecessary emissions.
Our E2 aircraft, such as the E190-E2, represent the most efficient models in the single-aisle market, combining new technologies with the experience of previous generations. This combination results in fuel-efficient aircraft that can introduce future technologies like hybrid and electric systems more easily.
Do you have plans to advance the implementation of newer technologies, such as electric and hydrogen?
Yes, we are actively studying various new technologies under our Energia project family of concept aircraft. This includes pure electric aircraft and hydrogen-powered models. However introducing hydrogen aircraft requires significant changes in infrastructure, such as airport facilities and operational procedures, which does make it more challenging.
We are also developing 100% electric aircraft, such as our eVTOL, through our subsidiary company Eve Air Mobility. This market is highly competitive, but Embraer is well-positioned due to our network, experience and credibility, which are essential for certifying and ultimately supporting the delivery of a new aircraft.
Overall, the demand and sales of Embraer’s E2 jets have been relatively slow, yet you are still predicting a ‘wave’ of orders. Why, and where is this explosion of demand going to come from?
The slow sales were due to a series of unfortunate coincidences in the beginning of the program. We launched the E2 program when the previous generation aircraft were still relatively young, averaging six to seven years old. This delayed replacement demand. Additionally, the failed 2020 deal with Boeing for our commercial aviation part to be carved out created insecurity and uncertainty among customers, which affected our sales.
COVID-19 further impacted the market in 2020, but interestingly, the E2 jets saw zero cancellations during the pandemic. Airlines realized the need for smaller aircraft to maintain their networks, making the E2 more attractive post-pandemic. As we emerge from COVID, we are seeing increased interest and new operators like Royal Jordanian in Jordan, SalamAir in Oman, Porter Airlines in Canada, and Scoot in Singapore all adopting our jets. We are also introducing the aircraft to Polish airlines later this year, so are seeing a significant increase in the number of interested operators.
Increases in the number of orders must increase the pressure on production. Can you tell us about the challenges you now face in 2024?
We are still limited by supply chain issues, although it is improving. Recent discussions with suppliers suggest that full normalization might not occur until 2028 or later. The primary bottleneck is engine availability due to infield issues with new-generation engines requiring more frequent overhauls.
Despite these challenges, Embraer faces fewer delays than other manufacturers. Our aircraft are lighter, so they demand less engine thrust, resulting in fewer engine issues and less impact on production. This reliability was highlighted by recent statements from American Airlines’ CEO Robert Isom.
What are the big plans for 2024, and what would it take to break the duopoly of Airbus and Boeing?
Our focus now is on execution across all business divisions. In commercial aviation, we see increasing demand for the E2 jets, driven by airlines looking to complement their fleets with smaller aircraft. In executive aviation, we continue to set records with a solid brand. Defense sales are strong, particularly with the C390 Millennium, and our services division is growing. We are also preparing for the certification and production of our EVE electric aircraft by 2026.
Breaking the duopoly is not easy, given the heavy government support for Airbus and Boeing. It would require a strong product proposition and a different attitude. Market customers are looking for alternatives due to discomfort with the current concentration. Embraer must be bold in stepping up to this challenge, offering innovative and reliable products.
