Tags: Brazil | jet | US | Business

Brazil's Embraer Sees Recovery of US Business-Jet Market

Wednesday, 22 August 2012 12:23 PM

Brazilian plane maker Embraer has seen clear signs of recovery in the U.S. executive aviation market, but global demand for business jets remains flat as uncertainty in Europe and a lingering inventory of used aircraft stifle a rebound, the head of Embraer's executive jet division said on Wednesday.

"We're seeing a revival but it's early days yet ... I would say the market continues to be flat," Ernest Edwards said in an interview at the LABACE air show in Sao Paulo. "I'm comfortable we'll make our projections, which are pretty much around the same numbers we had in 2011."

The plane maker delivered 99 private jets last year, missing its original estimates by about 20 planes as European debt crisis fears dampened the global economic outlook and sparked cancellations.

The company expects to deliver 90 to 105 private jets in 2012, a level which Edwards said "has become the new norm for us as business jet manufacturers.

Embraer's conservative tone contrasts with growing confidence from rivals like Cessna, owned by Textron Inc., which has reported rebounding demand and estimated 11 percent revenue growth for the industry in 2012.

Embraer's share of the global executive aviation market could climb as high as 30 percent after it begins delivering its midsized Legacy jets, but Edwards said the manufacturer can still capture a quarter of the market with its existing lineup.

Embraer's share of global business jet deliveries jumped from less than 5 percent in 2008 to nearly 20 percent in 2010 as its Phenom light jets entered service. But weaker demand in that segment dragged its market share back down to 15 percent last year.

"We don't want to be greedy. We'd be happy with 20 to 25 percent market share worldwide — that's just with today's products," Edwards said.

"I think the Legacy 500 and the 450, when those aircraft start delivering, it will surely improve our market share," he added. "20 to 30 percent would be healthy market share."

Embraer's Phenom 100 and 300, which seat up to eight and 11 passengers, respectively, continue to sell well in the United States, but Edwards noted the European market "has gone quiet on the lower end."

The Phenoms represented 27 percent of deliveries globally in their segment during the first half, he said.

Meanwhile, the "super midsized" Legacy 650, seating up to 14 passengers, continues to do well globally, Edwards added, and is gaining attention in the United States.

As deliveries of that jet gather steam in the second half, Edwards said its market share in that segment should climb from the 7 percent registered in the first half.

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Wednesday, 22 August 2012 12:23 PM
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