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Middle East demand helps boost sales of Embraer's E-Jets

 - November 11, 2007, 7:00 PM

Royal Jordanian Airlines has opted to take two 72-seat E-175 jetliners in lieu of two of seven 100-seat E-195s it ordered last year. The first of the E-175s is to be delivered in May 2008 and will feature a cabin with 60 economy-class seats and a 12-seat first-class section. The airline will deploy the new aircraft on a mix of domestic and regional routes.

The Middle Eastern carrier placed the original order for seven E-195s in March 2006 and has received four. The fifth is due to arrive at its Amman, Jordan headquarters before the end of this year. It acquired three of those aircraft through a lease from GE Commercial Aviation Services.

According to Mauro Kern, Embraer’s executive vice president for the airline market, the customers’ ability to switch between members of the E-170 and E-190 twinjet families has always been part of the Brazilian airframer’s marketing strategy. “By selecting a smaller model of the family for routes that require less capacity, Royal Jordanian will enjoy the benefits of high commonality with its Embraer 195, in terms of pilot and mechanic training and spare parts, while at the same time lowering its cost per trip,” he said.

Two other airlines and one private company in the Middle East operate Embraer’s regional jets, as does another commercial carrier in the neighboring South Asia region. Embraer has indicated that another Middle Eastern deal could be completed soon–with Oman Air, widely regarded by local sources as the unconfirmed prospect–and that it is in early talks with an Indian airline. In fact, Jet Airways founder-chairman Naresh Goyal told AIN earlier this year that he had resumed talks with Embraer after allowing a letter of intent for Embraer 175s to lapse.

The world’s fourth-ranking aircraft maker has ramped up its workforce by about 10 percent, to 21,000, since the beginning of this year and 2,000 more positions are to be created in 2008, a spokesperson said. According to company schedules, output of the E-Jets at Embraer’s São José dos Campos, Brazil facility will reach 14 per month by the end of this year and should rise to 18 by the end of 2008.

 Embraer broke into the Middle East airline market in April 2005 by winning a $400 million contract from Saudi Arabian Airlines for 15 E-170s configured to carry 66 passengers in a two-class layout on its domestic network. In September 2006, Egyptair Express ordered six E-170s and took options on another six. Meanwhile, the Sirte Oil Co. of Libya has taken delivery of one E-170, and India’s Paramount Airways has received two E-170s.

According to Luiz Sergio Chiessi, Embraer’s vice president for market intelligence, the Middle East accounts for just 3 percent of the anticipated regional jet sales in the 30- to 130-seat segment over the next 20 years. However, in reality, orders from this part of the world currently account for around 9 or 10 percent of total new sales.
Although the Middle East’s 6.5-percent airline passenger growth this year will be less than the 14.5 percent annual average recorded between 2002 and 2006, it will still be higher than the worldwide average growth of 5 percent, Chiessi told AIN.