Embraer Plans for Drop in E-Jet Deliveries in 2018

 - March 8, 2018, 12:20 PM

Embraer projects it will deliver between 85 and 95 E-Jets this year, down from the 101 it shipped in 2017, due to what Embraer CFO Jose Filippo characterized as typically slower production resulting from the transition to a new aircraft model. Speaking during the company’s fourth quarter 2017 earnings call Thursday, Filippo reported that Embraer expects lower delivery totals this year and in 2019, followed by a return to historical trends once it executes gradual acceleration of E2 production.

Embraer registered a book-to-bill ratio of 0.92 last year, a performance company CEO Paulo Cesar de Souza e Silva called “relatively good” compared with Embraer’s competition. Following its 1,400th E-Jet delivery in December, its commercial aircraft backlog stood at 435. Embraer expects to deliver the first recently certified E190-E2 to Wideroe of Norway next month.

“Going forward now, with the certification of the E190-E2...of course, the dynamic will be different,” said Silva. “We have an aircraft that is delivering more [performance] than we promised when we launched this program. So the performance of the aircraft overall is peaking such that the market will appreciate as it enters into service.”

Silva added that Embraer Commercial Aviation remains engaged in “many [sales] campaigns” around the world. “So we are quite bullish going forward,” he insisted.

Silva also said he expected the planned collaboration of Airbus and Bombardier on the C Series to stimulate the market in general, despite suggestions that Airbus’s pricing power could serve to limit margins among the competition.

“The announcement between Airbus and Bombardier was very important because, first of all, it validated the segment between 100 and 150 seats,” said Silva. “So this, of course, is bringing more interest from the market in general.”

On the question of Bombardier’s pricing behavior, Silva explained that most competition authorities—apart from Germany’s—haven’t yet approved the deal, making any assumptions about competitive changes premature.

“We can’t yet see any change because Airbus can’t work with Bombardier now,” said Silva. “We have to wait until all the authorities in many countries clear the deal. I believe only in the third quarter or so this year that Airbus and Bombardier will do a joint effort. So, so far, it’s business as usual.”