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Embraer Sees Success In North America With E175 and E2

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Embraer Sees Success In North America With E175 and E2

Embraer Sees Success In North America With E175 and E2
May 12
12:23 2015

MIAMI — Embraer’s best selling aircraft in North America is the E175, and in the last few years, we have seen many North American airlines add dozens of E175s to their fleet to help with replacing smaller and uneconomical ERJ-145s and CRJ-200s.

This year, the company will deliver 83 E-Jets to customers in North America, and as of right now, there are 436 ERJ aircraft and 420 E-Jets operating in North America.

Since 2013, Embraer has received 350 orders and 410 options and purchase rights from its North American customers, and when looking at short term and long term opportunities, Charlie Hills, Embraer’s Vice President of Sales and Marketing-North America, believes that the momentum will continue.

Short term, Hills says “we have 130 opportunities in North America. We may not win them all, but we still have quite a few opportunities.” Long term, Hills believes that the number of opportunities grows substantially as airlines will eventually want to replace older 70 seat aircraft in their fleets.

However, there are some challenges that the manufacturer has been and will need to continue navigating around. During the press conference, Hills explained that the Scope Clause–which prevents regional carriers from operating planes which exceed a certain seat capacity or weight limit–causes some turbulence for Embraer must navigate, but if it were to go away, there would be even more opportunities for new aircraft and growth.

The pilot shortage and ensuring good margins are also causing a bit of turbulence.

Despite the minor turbulence, Embraer is doing remarkably well, especially in North America; in the North America 70-130 seat category, Embraer owns about 60% of the market share while its competitor Bombardier owns about 32% of the market. Its goal is to continue to be the leader in the market, and with a 454 aircraft order backlog, it may just be able to do that.

Hills said that his customers love the E-Jet family, and when he asks why, most say it’s because it is the cheapest. Although, he says its not usually cheaper than the competition. He went on to explain that the E175 is a best in class airplane, ranging from the interior to the operating economics to the continuous investment Embraer puts into the program to keep improving the aircraft economics.

Since 2008, Embraer has invested millions into improving the technology of the E-Jet family which is where executives believe that a lot of the success in the E175 comes from; for example, it helped introduce the electronic flight bag in 2008, and more recently, it developed a new reduced fuel burn package which boasts new winglets that Bombardier’s CRJ-900 Next Generation aircraft have.

In fact about two years ago, Embraer announced the E2 family of Ejets. Within two days of announcing the new family members, it received 590 commitments from several carriers worldwide.

The E2 is unique; it’s not just an engine change, and it’s not a complete design change. Embraer wants to incorporate the latest technology, but on the proven platform that the E-Jet family has. It feared that if it went with a new design, it would face significant challenges, and it wanted to keep the E-Jet family going, given its success.

The E190-E2 is expected to go into service in 2018, and it will have about 97 seats. Although this is the same capacity as the existing E190, it will have a 16% fuel reduction per seat, and the components that will make up the first E190-E2s are already being constructed.

In 2019, the E195-E2 is expected to enter into service, followed by the E175-E2 in 2020.

Going beyond North America, the E-Jet family has been a huge success for Embraer elsewhere in the world. Before, the ERJ family was its most popular aircraft, but now that the E-Jets have greater range and more capacity, airlines in other countries have also been placing large orders. Hall points out that it’s thanks to the E-Jet family that it has been able to have a strong presence in new markets like the Middle East, Africa, and South America, just to name a few.

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Jack Harty

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