Embraer Won’t Yet Commit to E-Jet Successor

 - July 29, 2011, 12:16 PM

Notwithstanding Boeing’s apparent decision to re-engine the 737, Brazil’s Embraer still hasn’t decided what form a successor to its E-Jet series of airliners would take and might not do so until the end of the year, CEO Frederico Curado said today during the company’s second quarter earnings call.

Embraer has long insisted that it would wait for Boeing first to decide on whether or not to re-engine the 737NG before it moves forward with a decision of its own. Boeing’s sale to American Airlines of 100 of its 737s re-engined with CFM Leap-X turbofans would appear to present Embraer with the answer it needed. Nevertheless, according to Curado, too many unknowns remain to reach any conclusions on the best course of action for Embraer.  

“We still are not sure of what this re-engining is going to be, what models are going to be re-engined,” said Curado through an interpreter. “But I think this announcement by American Airlines indicates a direction to follow. So the competitive scenario is more or less outlined, and it’s a very important variable for us.”

The Boeing decision effectively prompted Embraer to intensify its analysis in terms of market investment, according to Curado, but it hasn’t offered enough clarity to determine whether or not to pursue an entirely new airplane “adjacent” in size to the E195, or a less complex, re-engined “stretch” of the largest Embraer airplane.

In either case, added Curado, Embraer would have to introduce an entirely new wing, so a so-called stretch would involve more than simply changing engines, inserting a fuselage plug and strengthening landing gear. In fact, Embraer has already dismissed any notion of a simple stretch of the 195.

From a purely technical standpoint, Embraer would prefer to introduce an entirely new aircraft, said Curado, largely because that option would offer more size and design flexibility. However, until Embraer reaches a conclusion about the seat capacity range it wants its airplane to occupy, it won’t commit to the level of investment needed for an entirely new jet. In either case, Embraer expects to maintain maximum commonality with the E-Jet line.  

“Even if we decide to go into a new family of aircraft, it would have great commonality with the E-Jets,” said Curado. “We have a base of 60 clients around the world on five continents and this customer base will certainly be protected.”