Embraer reports 'no apparent pressure' from China in ERJ talks

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Embraer is still assessing how China's plan to slow airline growth in 2009 will impact the region on a demand-capacity basis, but says talks with Grand China Express concerning a new ERJ-145 delivery schedule are occurring "with no apparent pressure from the Chinese Government".

The Civil Aviation Administration of China (CAAC) yesterday confirmed that the nation's airlines are being encouraged to postpone, or even cancel, deliveries of aircraft planned for next year.

The recommendation comes as Embraer continues negotiations with Grand China Express concerning the pace at which the Hainan Airlines subsidiary will take ERJ-145 regional jets.

Grand China has 40 ERJ-145s on order with the manufacturer. Three ERJ-145s slated for the carrier in the third quarter were not delivered due to a reduction in the planned growth of its fleet.

As a consequence, Embraer has slowed down the supply of parts and the procurement of supplies to its Chinese joint venture Harbin Embraer, which produces the ERJ-145, until it sorts out the new production rate.

"On the ERJ-145, the negotiations between Harbin Embraer and Hainan on a revised delivery schedule are ongoing with no apparent pressure from the Chinese Government," says Embraer executive vice-president airline market Mauro Kern.

"However, this recommendation by the CAAC still needs to be better understood as to which sectors of the air transport industry in China will be most impacted on a demand-capacity basis and which will be the most affected by these measures."

Customers with outstanding orders for Embraer E-Jets include Hainan and Kunpeng Airlines. According to Flight's ACAS database, Hainan has 44 E-190s on order with the airframer in addition to the 40 E-145s.

Kunpeng, meanwhile, operates one E-190 but is slated to receive four more of the type, says ACAS. The carrier previously said it hoped to get central government approval to order another 45 E-190s.

"We have not received any cancellation or deferral request from our E-Jet customers in China (Hainan and Kunpeng) up to now," says Kern.