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DUBAI: Embraer chief eyes Middle East sales as E2 line-up matures

The chief of Embraer’s commercial aircraft unit sees a big opportunity to expand the Middle East fleet of E-Jets, an aircraft he describes as perfectly suited for connecting smaller cities to the region’s massive hubs.

“I think the next phase of growth for the Middle East will be more local connectivity,” Embraer commercial aircraft chief executive John Slattery said ahead of the Dubai air show. “We think there is plenty of opportunity in this next cycle of Middle East fleet development.”

Such statements should be expected from Slattery, who has run Embraer’s commercial unit since 2016 and is set to remain chief after a planned acquisition of that business by Boeing. Embraer has delayed that deal’s expected close until at least March 2020, citing an extended review by European regulators.

Under Slattery, the company brought both the E190-E2 and E195-E2 to market and gained improved competitive advantage as Bombardier’s CRJ programme waned.

Now, as Dubai opens, Embraer inches closer to the E175-E2’s first flight, expected for December. That will cap a three-aircraft programme that by most accounts Embraer managed skillfully and on time.

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Embraer delivered the first E195-E2 in September, to Azul

Embraer

Embraer is displaying an E195-E2 at this year’s show. It is also bringing a range of business and military aircraft, what it calls the largest-ever collection of Embraer aircraft at Dubai.

In attendance will be Embraer’s newly certificated nine-passenger Praetor 500, marking that type’s Middle East debut, Embraer says.

Powered by Honeywell HTF7500Es, the Praetor 500’s redesigned winglets and additional fuel capacity give it 3,340nm (6,190km) range with four passengers – enough to connect London to Dubai, and 400nm more than its predecessor, the Legacy 450.

Embraer says the Praetor is the only midsize business jet with fly-by-wire flight controls and turbulence-reduction technology.

Also on hand will be Embraer’s Phenom 300E, which it calls the best-selling aircraft in the light business jet category.

Embraer is also highlighting military prowess at Dubai by showcasing its KC-390 airlifter and Super Tucano light attack aircraft. The airframer recently delivered its first KC-390 to the Brazilian air force and expects to deliver a second before year-end.

Fifteen of the world’s air forces operate Super Tucanos, including those of Afghanistan, Brazil, Chile, Colombia, Ecuador, the Dominican Republic, Lebanon, and Mali, according to Cirium fleets data.

But Slattery’s mind is on E-Jets.

He thinks airlines in the Middle East will need E-Jet-sized aircraft to feed passengers from “secondary or tertiary” cities to widebody aircraft departing from major hubs.

Slattery declines to cite specific countries or airlines, saying Embraer has several Middle East sales campaigns ongoing.

Embraer foresees that Middle East operators will need 290 aircraft with up to 150 seats by 2038, with the region’s fleet of aircraft in that category expected to jump from 210 in 2018 to 440 in 2038, according to the manufacturer’s forecast.

OPPORTUNITY KNOCKS

Embraer has a relatively modest footprint in the Middle East, where airlines like Royal Jordanian, Oman Air and Israel’s Arkia operate less than 20 E-Jets combined, according to Cirium fleets data.

It has no orders from Middle East airlines, but does, however, have major customers in the nearby region, such as Egyptair Express.

Slattery says the company is well positioned competitively.

Another regional airframer, Bombardier, is soon stopping CRJ production, which will leave Embraer in a stronger position.

But that is not to say that Embraer does not compete with other products – it faces some overlap with the Airbus A220. But Slattery quickly notes that E-Jets generally fill a different segment.

“Our niche is clearly defined as a regional jet operation,” he says.

Slattery argues that E-Jets are optimally designed to serve traditional regional-distance flights.

The E190-E2s have 97-114 seats and have 2,850nm range, while E195-E2s offer 120-146 seats with 2,600nm range. The in-development E175-E2 will have capacity of 80-90 seats and range of 2,000nm, according to Embraer.

Slattery describes A220s as closer to “mainline” aircraft. A220-100s carry 100-120 passengers up to 3,400nm, while A220-300s can accommodate 120-150 passengers up to 3,350nm, according to Airbus.

A more concerning competitive threat to Embraer may come from Mitsubishi Aircraft, which is developing its SpaceJet line of regional jets while working to close the purchase of the CRJ programme from Bombardier.

Mitsubishi Aircraft will not acquire CRJ production, which will cease. But it will gain the CRJ’s worldwide service footprint and engineering, technical and certification expertise – assets critical to developing, selling and bringing to market new aircraft.

Despite years of delays, Mitsubishi Aircraft says its 88-seat M90 will enter service in 2020. It is meanwhile developing the 76-seat M100, with a 2024 entry goal.

Notably, the M100’s maximum take-off weight will not exceed 39,000kg (86,000lb) – the limit for most US regional airlines, which are restricted by mainline carriers’ pilot contracts. The E175-E2 exceeds that weight, which, barring contract changes, excludes it as an option for prime US regional airlines, most of which operate first-generation E175s.

Slattery promises to continue producing first-gen E175s as long as US carriers want, but scope dynamics could make the M100 a formidable competitor.

Bring it on, Slattery says.

“They will be a strong competitor in the fullness of time, but they probably have a lot of work to get through,” Slattery says. “Competition forces Embraer to pay more attention to our customers, to listen more carefully.”

Despite years of delays, Mitsubishi Aircraft says its 88-seat M90 will enter service in 2020. It is meanwhile developing the 76-seat M100, with a 2024 entry goal.

Notably, the M100's aircraft's maximum takeoff weight will not exceed 86,000lb (39,000km) – the limit for most US regional airlines, which are restricted by mainline carriers' pilot contracts. The E175-E2 exceeds that weight, which, barring contract changes, makes it a non-option for prime US regional airlines, most of which operate first-generation E175s.

Slattery promises to continue producing first-gen E175s as long as US carriers want, but scope dynamics could make the M100 a formidable competitor.

Bring it on, Slattery says.

"They will be strong competitor in the fullness of time, but they probably have a lot of work to get through," Slattery says. "Competition forces Embraer to pay more attention to our customers, to listen more carefully."

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