MIAMI — Embraer has released its aircraft forecast for the Asia-Pacific region at the 2018 Singapore Airshow.
The manufacturer believes that airlines across the continental region will take delivery of around 3,010 new aircraft in the segment with up to 150 seats plus over the next twenty years.
This represents about 29% of the total worldwide demand for that specific market.
The total demand for the segment over the next two decades is around 10,550 new aircraft.
This forecast is a result of the experienced rapid social and economic development of the continent in the past decade.
The region’s annual GDP growth rate is forecasted at 3.9% for the next 20 years, which is combining itself with increasing urbanization and shifting demographic patterns, which will ultimately result in higher household incomes and increased discretionary spending, in which air travel falls under.
— Embraer (@embraer) February 7, 2018
“The ongoing over-capacity and intense competition in the region has prevented airlines from delivering higher profits. In this regard, the E-Jets E2 can help airlines to open new markets at the lowest possible risk, complement larger fleet types to maximize profit, and achieve sustainable growth with higher profitability,” said César Pereira, Vice-President for Asia-Pacific, Embraer Commercial Aviation.
“We continue to identify to airline’s opportunities in markets that are currently underserved or not served at all. With the E2’s, we can offer great operational flexibility, broaden the network reach to 2nd and 3rd tier cities, adding frequency to build competitive advantage and access to more airports without any limitations,” explains Pereira.
Embraer also thinks that the Chinese market will be the most robust industry for them to thrive in.
The Chinese start-up carriers that are emerging in the market are currently growing from small and mid-sized cities, thanks to government subsidies that will go towards the development of the regional aviation market in China. Embraer’s E-Jets are supposedly the perfect options for Chinese carriers alike.
On top of that benefit, in the region as a whole, is the aging incumbent fleet of E-Jets. It is estimated that around 250 E-Jets are nearing the age of 10 years old, meaning that soon, certain airlines in the continent will be looking to retire and scrap those aircraft, and will look for newer replacements.
Bombardier & Airbus Marriage – Will Embraer be affected by this?
Within each of an aircraft manufacturer’s forecast comes to the risk of other competitors also thriving in said forecasted market.
With the recent marriage of Airbus and Bombardier taking shape in the form of the majority stake in the C-Series program, how will Embraer fare?
After continued and failed talks with Boeing for investment stakes in their programs, it will be indeed interesting to see whether Embraer can compete sufficiently with the massively well-invested plan that is the Bombardier CSeries after Airbus has married it.
READ MORE: Bombardier Wins Trade Dispute Against Boeing
As the E-Jets currently compete with the CSeries, there is ample opportunity for Bombardier to take away parts of the Asia-Pacific segment, meaning that Embraer’s forecasts could be altered in a far negative way.
To stop this, Embraer requires large orders at Farnborough and also at the Singapore Air Show this week to get a foothold in the segment before Bombardier make their move.
And with the ITC ruling in favor of Bombardier, the chains can be argued to be most probably off now as they will be looking to expand their programmes out into Asia and to the further corners of the globe.
Overall, in this seat market, the competition will look to most definitely heat-up, and the question of Embraer’s durability as a manufacturer could come into question if they cannot find more significant investors of their program, like with the Airbus/Bombardier marriage.