Embraer warned on 2 May that profit margins and deliveries for commercial aircraft could decline in 2018 as the manufacturer transitions to a new family of products.

“We may see some lower margins in 2018 or maybe less aircraft in 2018,” says Embraer president and chief executive Paulo Cesar Silva told analysts on a first quarter earnings call.

Embraer delivered 108 E-Jet family aircraft in 2016, but plans to certificate the re-engined and re-winged E-Jet E2 family by the end of this year before beginning deliveries in 2018.

As the E-Jet E2 family enters the production system, margins and deliveries could suffer next year before rebounding in 2019, Silva says.

“From 2019 and on we are already anticipating the margin will improve again,” he says.

The delivery rate for next year could decline, but it remains too early to predict, he adds.

Embraer launched the E-Jet E2 programme four years ago, replacing the GE Aviation CF34 turbofan engines with Pratt & Whitney PW1700G and PW1900G geared turbofan engines. Embraer also redesigned the wing and integrated a full fly-by-wire system on the E-Jet E2 family.

The first E-Jet E2 – an E190-E2 – completed first flight last May and is on track for certification by the end of the year.

Embraer also completed first flight of the first E195-E2 in March, but the stretched model will be delivered in 2019.

The delivery of the first E175-E2 was previously delayed until 2021, as Embraer waits to see whether US airline unions lift weight restrictions embedded into scope clause agreements with major carriers.

Source: Cirium Dashboard