Embraer poised to have best sales in 3 years

Despite the crisis, Embraer celebrates in 2015 its best sales of commercial jets of the last three years. From January to September, firm orders announced by the company for its E-Jets (E1 and E2 jets, of 70 to 130 seats) totaled 165 units, compared with 130 units in the same period last year, said Paulo Cesar Silva, CEO of Embraer Aviação Comercial.

In 2014, sales of E-Jets totaled 137 units. "Within two years of its launch, the new generation E-2 has accumulated total orders of 640 units, of which 267 are firm and 373 with purchase rights," said executive said. The sales results, Mr. Silva added, confirms Embraer’ leadership in this market with 60% share.

The performance of commercial aviation in 2015 will increase its share in revenues in the third-quarter earnings and the backlog is poised to reach a new record. In late June, the volume of firm orders was at $22.9 billion, but the figure also includes other business units.

Sales of new models are already higher than that of the first generation, but Embraer believes that the first jets’ good performance was decisive, since it created a positive reference to the E2. Launched in 2009, the first generation of E-Jets had in the same period 112 firm orders and 202 purchase options.

The sales boom in the US market at the moment is compensating the reduction of orders in emerging countries and the still low volume in Europe, although the region has been signaling some recovery.

"The dollar is getting stronger worldwide. The [US] Federal Reserve is likely to raise interest rates and this will further affect the emerging countries. The combination of devaluation of currencies and a less buoyant economy does not favor airlines in these regions,” he said.

US airlines, on the other hand, are more efficient and making a lot of money, especially after reorganizing their accounts.

Embraer foresees a demand for 2,060 new jets in the segment of 70-130 seats from the US market in the next 20 years. "It's almost 35% of total world demand for aircraft in this segment, somewhere around $96 billion," Mr. Silva said.

The successful sales of the E175 model in the US (where there is a limit of 76 seats for regional companies), for example, helps Embraer to keep its revenues up until the arrival of the new E2 jets in 2018.

In the last three years, the company sold 265 units of the model, which received aerodynamic improvements and ensured 6.4% efficiency in fuel consumption. "The E175 is by far the best aircraft in its category. We sell four times more than the CRJ 900 model of Bombardier in the US," Mr. Silva said.

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