NetJets and Embraer arrived at NBAA-BACE with a blockbuster deal for up to 100 Phenom 300Es valued at $1.2 billion, further underscoring the resurgence of the business jet market. Announced Monday, the deal continues the more than a decade-long relationship between the Brazilian airframer and fractional ownership provider and calls for deliveries headed to both the U.S. and Europe beginning in the second quarter of 2023.
While Embraer is not revealing the mix of orders and options on the latest deal, Embraer Executive Jets president and CEO Michael Amalfitano noted that his company's first contract from NetJets in 2010 called for 50 firm orders and 75 options and “we've now delivered those aircraft to them…they have had a consistent track record of taking every single option and firm order.”
With the white-hot business aviation market, NetJets has had to halt sales of its fractional shares in the light jet categories and jet cards because it has been selling out, Amalfitano said. “Now we're going to help them with this new order to continue to revitalize that segment for them, he said. “That's exciting for us because it continues to showcase their commitment to Embraer, but it's also exciting because many more customers are going to have access to the fastest, longest-range, light jet in the marketplace.”
Embraer is obtaining supplemental type certification from both the U.S. FAA and the European Union Aviation Safety Agency for the NetJets specifications, he said, noting that’s why deliveries are planned in 2023.
While he couldn’t project how far into the future the deliveries would continue, he noted the 2010 order spanned about 10 years. However, for the next batch, “more of those airplanes may move in sooner than previously because of the frothiness right now of the recovery in that segment,” Amalfitano said. “They'll be taking many more deliveries in 2023 than they have historically done. So, I think the pace will probably be much faster than the previous cycle.”
The order continues the record year that Embraer has been enjoying. “A lot of it's been driven by the strength of the recovery of the marketplace overall, but Embraer is doing fantastic.”
The company has had a record sales year through the first half of 2021, reaching a book-to-bill of 2:1, and momentum is continuing in the third quarter, he said. “We have sold out of our aircraft, in 2022. We are now selling aircraft into 2023.”
Along with fleet providers such as NetJets, Embraer (Booth 1974, Static A101) has also received a bounce from first-time buyers. These newcomers tend to represent somewhere between 10 percent to 12 percent of sales, historically. But since the pandemic, that number has jumped to more than 30 percent and they represented 34 percent of Embraer’s business in the first half, he said.
“That's a good statement for the marketplace, which means that the pie has actually gotten bigger with more folks coming into business aviation. That also drove down the pre-owned aircraft to historic low levels of inventory across the brands,” he said.
Available fleets are now in the 2 percent to 5 percent range, depending on models, Amalfitano said, adding this is moving customers into new planes.
Embraer is displaying four aircraft this week at the NBAA-BACE static displaying, including a Phenom 100EV and 300E, along with a Praetor 500 and 600.