Embraer said on Wednesday it was aiming for stable profit margins in 2014 as better pricing on executive jets should offset deep discounts on big regional jet orders. The plane maker's outlook reinforced the advantages of an increasingly diversified revenue stream, which now depends on airlines for just half of sales. "The major headwind we have in 2014 is... the reduction in gross margins on the commercial jets, which remain our main business. So we intend to compensate that with better margins in executive aviation," chief executive Frederico Curado said in Sao Paulo. A handful of large contracts from major US airlines last year replenished Embraer's depleted order book, but raised concerns of deep discounting to win the deals. Curado said a more positive exchange rate and signs of a recovery in the business jet market could offset the pressure. Executives also sounded confident of new deals. Curado mentioned "strong order momentum" for commercial jets and promised at least one new aircraft order for every plane delivered in 2014. (Reuters)
The plane maker's outlook reinforced the advantages of an increasingly diversified revenue stream, which now depends on airlines for just half of sales. "The major headwind we have in 2014 is... the reduction in gross margins on the commercial jets, which remain our main business. So we intend to compensate that with better margins in executive aviation," chief executive Frederico Curado said in Sao Paulo. A handful of large contracts from major US airlines last year replenished Embraer's depleted order book, but raised concerns of deep discounting to win the deals. Curado said a more positive exchange rate and signs of a recovery in the business jet market could offset the pressure. Executives also sounded confident of new deals. Curado mentioned "strong order momentum" for commercial jets and promised at least one new aircraft order for every plane delivered in 2014. LATE SPRINT The bullish order outlook and nearly stable forecasts for revenue, production and profit margins followed a rush of aircraft deliveries at the end of last year that helped Embraer meet its 2013 targets. Embraer's fourth-quarter profit more than doubled from a year earlier to USD$265 million. EBITDA rose 75 percent to USD$544 million. EBITDA equaled 16.1 percent of revenue in 2013, above Embraer's EBITDA margin target of 13-14 percent. EBIT came to 11.4 percent of revenue, above its EBIT margin forecast of between 9 and 9.5 percent. Earnings were boosted by the resolution of the American Airlines bankruptcy, which allowed Embraer to roll back the provisions it had set aside for a potentially messy restructuring of a major customer. But even without that one-time effect the company said it would have hit its 2013 targets. Embraer's delivery outlook for commercial jets in 2014 rose slightly to 92-97 aircraft, after the plane maker hit the bottom of its 90-95 jet forecast for 2013. The company's revenue target also edged up to between USD$6 billion and USD$6.5 billion after 2013 revenue of USD$6.235 fell comfortably within its target of USD$5.9 billion to USD$6.4 billion, due to strong demand for its business jets. Embraer nearly exceeded its 2013 target for executive jet deliveries, but held the same forecasts for this year, aiming for 80-90 light aircraft and 25-30 big private jets in a sign of caution over a delicate executive aviation recovery. The breakdown of revenue between Embraer's divisions is not expected to change significantly in 2014, with 53 percent coming from commercial aviation, 26 percent from executive aviation and 20 percent from the military and security unit. Embraer plans to invest USD$650 million this year, up from a 2013 investment plan of USD$580 million, as it ramps up development of a military cargo jet and next-generation regional aircraft. Curado said investments would likely be of a similar scale in 2015. He added that the executive jet business should improve by then, helped by new mid-size Legacy jets. Commercial jet production should be stable in coming years as several airlines are likely to exercise purchase options for new planes, he said, offering some possibility of upside. An order for Embraer regional jets has not been affected by an American Eagle pilots union rejection of a new contract, Embraer chief financial officer José Antonio Filippo said. American Airlines Group said earlier this month it would begin looking for other regional carriers to operate the new Embraer regional jets. (Reuters)
Here's a look at that E175 with the new wing tips to aid in the improved fuel-burn. http://www.youtube.com/watch?v=XFEM1vcDrYE&sns=fb
Embraer Executive Jets Names Hong Kong-based Metrojet as Greater China’s First Legacy 500 Authorized Service Center.
Embraer Executive Jets has brought nearly its entire portfolio to this week’s AfBAA Expo in Morocco. Configured in the company’s new uniform exterior design, a Lineage 1000E, a Legacy 650 and a Phenom 300 are on static display at Marrakech/Menara (RAK).
Embraer on Wednesday said that first quarter profit more than tripled, with military and business jet revenue surging. Net income rose to USD$111 million, well above the USD$30 million profit a year ago. Earnings before interest, taxes, depreciation and amortisation rose 50 percent to USD$151 million. The robust earnings underscored Embraer's effort to diversify beyond its commercial aviation business and develop a lineup of executive aircraft and military products as it works to upgrade its mainstay regional E-Jet. Military revenue jumped 57 percent and business jet sales were up 53 percent from a year earlier. That offset a 13 percent slide in commercial jet revenue in the weakest quarter for E-Jet deliveries in more than five years. Brazil's currency also improved the profitability of Embraer's export-focused business, with an 11 percent depreciation in 12 months. Currency variations in the first quarter eased Embraer's tax bill by USD$48 million. (Reuters)
Embraer E2 With its landmark selection by Embraer to power the second-generation E-Jet, Pratt & Whitney has nearly eliminated General Electric's once dominant position as a propulsion supplier in the large regional jet segment. Namely, P&W will supply the PW1700G geared turbofan for the E175-E2 and the PW1900G for the E190-E2/E195-E2 family, with deliveries starting in late 2015. Prior to Embraer's selection, the geared turbofan had been selected by three new platforms and the Airbus A320neo, which is based on a platform that also uses a partially P&W-sourced engine - PW1100G-JM. From light weight fan blades, cutting-edge materials and coatings, to advanced airfoil cooling, the suite of technologies in the GTF engine delivers the high efficiency with lower temperatures that drive improved durability with a lower overall cost of ownership. The geared turbofan had never before won a contract facing GE or its CFM International joint venture with Snecma as an incumbent supplier. Most notably, Boeing rejected P&W's attempts to even compete against CFM Leap-1B (fan diameter: 175,3 cm / 69 in) for the 737 Max. Now, the geared turbofan unseats GE as the supplier for the second-generation E-Jet, defeating GE with its eCore-derived NG34 powerplant. Until Embraer's decision, GE had achieved a near-monopoly in the 70-120-seat engine market, having supplied the military-derived CF34 turbofan for the first-generation E-Jet, Bombardier CRJ700/900/1000 and the Comac ARJ21. The only platforms to escape GE's grasp in the sector was the PowerJet SaM146 (joint venture between Snecma of France and NPO Saturn of Russia) equipped Superjet by Sukhoi and the developmental Mitsubishi Regional Jet, which is powered by a geared turbofan variant called the PW1200G. As the MRJ powerplant, PurePower has clearly created a threat to Embraer, in much the same way that the PurePower/CSeries combination created a threat to Airbus. Airbus, of course, reacted by co-opting new engines and Embraer reacted the same way. P&W will adapt the PW1700G from the MRJ's PW1200G and the PW1900G from the Bombardier CSeries' PW1500G. The PW1700G (1GF-2LPC-8HPC-2HPT-3LPT) will feature the same 142,2 cm / 56in diameter fan of the MRJ engine, and the PW1900G (1GF-3LPC-8HPC-2HPT-3LPT) will share the 185,4 cm / 73 in diameter fan with the CSeries engine. Other changes include new high aspect-ratio wings for the E175-E2 and the E190/195-E2, both with longer span and raked tips instead of winglets. The wings are metal as composites are not cost-effective on this size of aircraft. The landing gear is longer, to accommodate the larger-diameter engines, and the Honeywell Epic 2 avionics feature large-screen displays. The E2 family moves to full fly-by-wire, as used by Embraer on the Legacy 450/500 business jet and KC-390 tanker/transport. After problems developing the Legacy system, the company has switched its supplier, to Moog, and will take a greater role in developing the control laws, writing the software and integrating the fly-by-wire system. While the E175-E2 and E195-E2 are stretched, they retain the same range as the Embraer 175 and 195. The E190-E2 stays at the same capacity, but has 450 nm longer range. List prices for the E2s will be about 15% higher than for the current E-Jet family. Suppliers have been selected and the joint definition phase is underway in Brazil. The E190-E2 will be the first variant to fly, in the second half of 2016, and will enter service in the first half of 2018, followed by the E195-E2 in 2019 and E175-E2 in 2020. Embraer is aiming to gain 40-45% of a market it estimates at 6.400 deliveries over 20 years. Staying away from Airbus and Boeing territory is key to Embraer's commercial-aircraft strategy as the company looks to grow... Mario
Embraer has delivered its 500th Phenom business jet in slightly more than five and a half years. The delivery on 5 June of a Phenom 300 to Brazilian start-up Prime Fraction Club made Embraer cross a key milestone. It basically showcases the Brazilian manufacturer's quick rise to the summit of the light jet category.
Embraer to showcase solutions at the Farnborough International Airshow including the large cabin Legacy 650.
Embraer ups on deliveries of business jets for the second quarter of 2014. The first quarter saw 20 deliveries. Keep your eyes on the news section to see how many they delivered in Q2'14.
Embraer celebrates the 200th delivery of the Phenom 300 which coincidentally is the 25th Phenom 300 for Netjets, more on this later today.
Embraer trimmed its global sales forecast over the next decade but raised its outlook for executive jet sales in North America, highlighting the importance of the US market for a business jet recovery. Embraer cut its worldwide outlook to 9,235 aircraft sold in the next decade, from 9,250 in last year's ten-year estimate. The plane maker expects 4,620 business jets to be sold for a total of USD$120 billion in the North American market from 2015 to 2024, up from 4,530 in its 2014-2023 forecast. The shift is taking place as jet buyers in emerging economies such as Brazil, Russia, India, China and South Africa, commonly referred to as the BRICS group, grow more wary over the outlook for domestic economic growth. Embraer sees 850 aircraft sold in Latin America over the next ten years, down from 860 in the previous ten-year estimate, while the Asia Pacific and China market should see 1,405 jets sold, down from 1,530. "We will continue to see slow growth in coming years due to indecision over whether or not to buy new planes or replace existing aircraft, principally in the BRICS countries," Embraer executive aviation chief Marco Tulio Pellegrini said. "The recovery in the market will depend very much on the American economy." Still, while many US corporations are seeing profits rise, they have remained cautious about investing in new aircraft until economic growth looks more stable, Pellegrini said. He added that a few quarters of encouraging US growth would likely translate into higher business confidence and stronger jet sales. (Reuters)
Embraer Executive Jets opened new facilities at its Contact Center, this month, to provide operational, technical and maintenance support for the global fleet of business jets. The facility expansion takes place five years after the center began its operations in 2009. During this time, the fleet of Embraer executive jets has quintupled in size. There are currently more than 780 Embraer Executive Jets aircraft in operation in over 50 countries, and they are supported by the Contact Center 24 hours a day, 365 days a year. “Investing in support and services for full customer satisfaction has been one of our competitive advantages, which is proven by product support surveys conducted by the trade press,” said Edson Carlos Mallaco, Vice President Customer Support and Services, Embraer Executive Jets. “Our Contact Center is staffed by experienced professionals who are qualified to provide services for different levels of events.” The Contact Center is located at Embraer’s headquarters, in São José dos Campos, providing personalized service with the objective of minimizing the response time from the first contact to the final solution for a broad range of customer needs, anywhere in the world. This service is integrated with the company-owned and authorized service centers, the parts distribution centers, and the field service representatives, as well as the technical, flight operations, and maintenance support teams.
Japan Airlines (JAL) announced orders for up to 52 regional jets on Thursday. The order includes both Embraer EJets and Mitsubishi’s new MRJ. Japan-based JAL signed a firm order with Embraer for fifteen E-Jets, split between the E170 and E190. It did not say how many of each would be delivered. The order also included options for up to twelve more of the jets. Deliveries will begin in 2015, with the airplanes going to its regional subsidiary, J-Air.
