Embraer sees rebound in deliveries, mulls upgrades

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Brazilian aerospace group Embraer predicted a rebound in regional jet deliveries over the next two years as the commercial aviation industry posts a stronger than expected recovery from recession. “By 2012 we can be back to the record levels of 2008,” Luiz Chiessi, vice president of market intelligence for the company’s airliner business, told a media briefing on Wednesday.

Chiessi said Embraer would deliver about 90 of its regional E-jet range this year, down from almost 120 in 2009. It could deliver 140-160 by 2012 with a pick-up already seen in 2011. Embraer delivered 160 of the 80-120 seat aircraft in 2008. The forecast came a day after Boeing announced plans to raise production of narrow-body jets for the second time this year.

Airbus is also increasing production. Airlines expect to be back in the black on a global basis this year following a crippling two-year recession. The exception is Europe, which is facing a severe debt crunch. The International Air Transport Association said provisional data for May suggested a strong rebound in traffic which fell during April’s Icelandic volcano crisis, although it sees risks ahead for Europe.

Embraer competes mainly with Canada’s Bombardier in the market for aircraft with 60-120 seats, but both companies are also encroaching on the market for large passenger jets over 100 seats controlled by Airbus and Boeing. Embraer is studying whether to upgrade its E-Jet regional airliners to improve fuel efficiency as Airbus and Boeing mull possible upgrades to their fleets to improve performance.

Any upgrade would be an evolution of existing planes using new engines or modified wings but would use the existing fuselage rather than a complete redesign, Chiessi said, adding it would make a decision in the second half of the year. Embraer is also in negotiations with the Chinese government on whether to switch a joint venture assembly plant at Harbin, China, over to E-190s from the smaller 50-seat ERJ 145.

In a separate matter, Chiessi said no talks were taking place between Embraer and Airbus parent EADS over possible co-operation, despite suggestions briefly put forward by EADS last week. The companies discussed co-operation in the past when EADS owned Embraer shares but there is “nothing on the table” now, Chiessi said. “I can’t decide what to eat for lunch if there is nothing on the menu,” he told reporters.



EADS Chief Executive Louis Gallois told a news conference in Berlin last week the European firm was “eager to find ways of partnering” with Embraer but later dismissed talk of a tie-up.