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05/06/2002
In: Press Releases

 EMBRAER PRESENTS ITS 20-YEAR MARKET FORECAST (2002-2021)

Value of Regional Jet orders estimated at US$ 200 Billion

 

Berlin, May 6, 2002 – Embraer forecasts the value of the 30 to120-seat regional and commercial jet aircraft market segment at US$ 200 billion over the next 20 years.

At a press conference held today at ILA 2002 in Berlin, Embraer presented its 2002-2021 world-wide market forecast for the 30 to120-seat jet segment which shows a demand of 8,695 aircraft. Between now and the year 2011, the company predicts 4,085 jets will be delivered and another 4,610 aircraft delivered in the following decade from 2012-2021. The total value of this market is expected to reach US$ 200 billion.

Embraer’s analysis shows that the majority of world deliveries in the next 10 years will be to the U.S. market – 2,130 aircraft – or about 52%. Europe follows as the second largest region with 960 aircraft – or 24% - delivered by 2011.

The company’s market forecast reveals several factors in determining the number of 30 to 120-seat aircraft including the accelerated replacement of turboprops by high-productivity regional jets combined with an overall passenger preference for jets.

The company has been analyzing the growing world trend to longer flights on thin-demand routes which, it predicts, will create opportunities for additional regional jet services. In Europe, several operators are routinely flying ERJs on sectors of more than two hours duration while regional aircraft of the past generally flew on short sectors of 45-55 minutes.

The demand for longer-range RJs has led Embraer to develop the ERJ 145XR. This extra-range version of the popular 50-seat ERJ 145 can fly up to 2,000 nm and will enter into service with Continental’s Express Jet Airlines in the USA, soon after September 2002 certification.

Of the 8,695 regional and commercial jet deliveries Embraer forecasts in the next 20 years, more than half will be in the 61 to 120-seat category:

Seat Category Deliveries Share
30 a 60 assentos 3.545

41%

61 a 90 assentos 2.370 27%
91 a 120 assentos 2.780   32%


The sustained demand for larger-capacity aircraft is expected to result from an increase in average aircraft seat capacity. From 1990 to 2000, the average number of seats per aircraft has increased from 48 to 66. Embraer estimates the average seat capacity will rise to 74 by 2010.

Embraer believes that its philosophy of building families of aircraft, which it contributes to the success of the 37, 44, & 50-seat ERJ program, will prove instrumental in the emerging 61 to 90-seat aircraft category. The company expects operators of its new generation of EMBRAER 170/175/190/195 commercial jets to benefit from the high degree of commonality within that family, similar to the 98% parts & systems commonality within the ERJ 135/140/145 regional jet family.

The market outlook will also be affected by the mid-2001 downturn in the airline industry. Embraer predicts that a portion of the capacity previously generated by 1,398 parked aircraft will need to be replaced. Few of those out-of-service aircraft (3%) are regional jets in the 30 to 60-seat category – the majority are turboprops (41%) and older-generation aircraft in the 91 to151-seat category. The company predicts that airlines will fine-tune capacity to demand by using more regional jets in place of older, larger aircraft which were in service in 2001.

Prudent cash management by airlines is also expected to shape the evolution of the market. With the airlines’ focus on returning to profitability in the current low-yield environment, new-generation regional & commercial jets should help the airlines with fuel efficient, cost-effective, comfortable, and reliable fleet solutions.

Embraer anticipates that its new family of EMBRAER 170/175/190/195 jets will provide those solutions and will capture a share of the emerging 61 to 120-seat market when these four aircraft types take to the skies between the first quarter of 2003 and December 2005.

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