Embraer wins more orders for regional jets

June 21, 2011 at 6:27 PM
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RIO DE JANEIRO, June 21 (UPI) -- Brazilian aircraft manufacturer Embraer has won more orders for its E-190 regional jet and hopes to secure the U.S. Delta Air Lines as a long-term customer in a major advance toward the company's goal of competing in the international market.

Embraer officials have made no secret of their ambition to take on European and North American manufacturers of aircraft with their cheaper alternatives.

The small aircraft market, increasingly coveted by manufacturers from Russia and other emerging market economies, has seen growth with the rise of air travel in South America, Africa and Asia -- particularly China.

Air travel growth runs counter to international avowals of measures that will reduce the global carbon footprint and help curtail activity seen to contribute to climate change.

Embraer announced its sale of 39 E-190 regional jets at the Paris Air Show and also hinted it had a good chance of winning a Delta Air Lines contract.

Embraer is hoping to sell up to 100 regional jets to Delta as replacements for the airline's aging fleet. More important, industry analysts said, Embraer hopes an initial contract for the regional aircraft will improve its chance of winning other contracts with Delta and other North American airlines.

Delta is understood to be planning to purchase up to 400 jets but hasn't announced potential suppliers. Embraer officials indicated that although they remained optimistic Delta was holding talks with "everyone" -- an international range of suppliers.

The company's orders for 39 E-190 regional jets are said to be worth $1.7 billion, based on list prices, but Embraer sees itself well positioned to capture a good slice of the growing market worldwide.

The Brazilian company's estimates, backed up by data on international trends, set global demand for regional for regional jets to exceed 7,000 jets in the next two decades. The price tag on those orders may be at least $320 billion.

Many of Embraer's current customers are in countries in Asia and Africa, including some that have faced difficulties buying defense and civil aviation equipment from the United States.

China is also developing its aircraft industry and although currently a customer in South America and Asia, soon hopes to outstrip its current suppliers of aviation inventories. Currently Brazil is the world's largest producer of regional jets.

Brazil's strong financial outlook has enabled Embraer to offer attractive terms to its customers but in the U.S. and European markets the manufacturer is up against stiff competition from Boeing and other U.S. manufacturers and Airbus Industrie. Canada's Bombardier is in direct competition with Embraer in the regional aircraft market and is able to offer competitive terms sought by customers in developing countries and emerging markets.

The long-haul aircraft market is still dominated by Boeing and Airbus and engine suppliers Rolls-Royce. The long-haul aircraft manufacturers' prospects were boosted with the growth of global customer base for the Rolls-Royce Trent XWB jet engine, which is said to offer 25 percent better fuel efficiency than its predecessors. More than 1,100 Trent XWB engines have been sold worldwide, distributed among 36 clients.

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