Embraer Banks on Surging U.S. Market

 - May 8, 2013, 2:03 PM
Embraer Commercial Aviation CEO Paulo Cesar de Souza e Silva says rising demand from U.S. airlines is compensating for lean times over in Europe. [Photo: Gregory Polek].

Embraer Commercial Aviation CEO Paulo Cesar de Souza e Silva said he sees requests for proposals coming from U.S. airlines for between 200 and 400 regional jets in the 70- to 76-seat market segment as relaxed scope clauses continue to drive demand on this side of the Atlantic while a “pause” in Europe takes hold. He specifically mentioned the potential for more business from American Airlines, for which Republic Airways has already agreed to fly 53 more E175s as American Eagle starting next month.

Speaking with AIN at Embraer’s stand at the RAA Convention in Montreal, Silva described last month’s firm order from United Airlines for 30 E175s as a “big deal” for the company, and largely attributable to interim improvements in the 76-seat jets that will, by next April, add 5.5 percent fuel efficiency over the current airplanes. The improvement, resulting mainly from new wingtips and some aerodynamic “cleaning” of the fuselage, will result in a product that will hold a 4 percent operating cost advantage over the Bombardier CRJ900, claimed Silva.

The Brazilian chief executive said that Embraer needed further relaxation of scope restraints to see a similar surge in orders in the U.S. for the E190 and E195, neither of which Embraer plans to retrofit with the new winglets now under test for the E175.

Silva explained that by the time Embraer could make the improvements available on the larger airplanes, the so-called second-generation E-Jets will have already reached the market, specifically in 2018. On the second-generation airplanes, colloquially known as the G2s, the Embraer executive opted not to offer any details beyond the expectation that the airplanes will offer double-digit operating cost gains over the current models.

“We have made selections for the engines, of course, and the avionics and other systems, but we are still doing the final bids for the other systems, et cetera,” said Silva. “But we would prefer to wait to elaborate, because if I talk now I would not talk as I should be talking to express to you how bullish we are on this aircraft.”