Embraer Forecasts Demand for 720 New Jets in Latin America

In the picture, the first E190-E2 prototype Embraer produced in Brazil in its Rollout ceremony
Photo Exclusive by photographer Herbert Monfre



This week our faithful readers have had the pleasure to follow the expectations for the aviation market in Latin America for the next 20 years. We publish here on our blog two articles (three, with this one you are reading), a Boeing (read here) and the other Airbus (read here), today publish about Embraer to market of aircraft of 70 to 130 seats in Latin America.

The announcement of Embraer Commercial Aviation happened during FIDAE (Feria del Aire y del Espacio). The Company expects will be delivered in the region 720 new jets in the segment of 70-130 seats over the next 20 years, representing 11% of global demand for this segment in the period. The fleet of jets 70-130 seats in service in Latin America will grow from the current 310 units to 740 by 2034.

Despite the current hardships, which mainly stem from political and economic instability in the region, the medium and long-term growth prospects remain positive in the coming years. An economic recovery is expected, addressing macroeconomic imbalances and restoring business confidence. This recovery will result in more equitable income distribution and deeper regional integration, which will increase the demand for air travel.

Over the past five years, the annual growth of air travel demand in Latin America has been around 7%, consistently above the global average of about 5%. This trend should continue over the next 20 years, when the region will grow about 6% per year.



The growing middle class in the region also attract new customers to the airlines, since many people have yet to board the first flight, making Latin America more mature for air transport. Comparing the region with a mature market for air travel, such as the United States, there is huge potential for growth: Latin America has 0.4 per capita passenger, a value that is a US sixth.

Along with the expansion of the middle class, new aviation infrastructure investments will shape the way the air transport will grow in the coming years. The broader scope of air transport in addition to the main financial and industrial centers, reaching the medium-sized cities - with populations between 100,001 million inhabitants - has caused an increase in demand of about 1.5 times faster than for big cities. This growth highlights the need for efficient air service to new markets low and medium density, and higher frequencies in existing markets.

"The optimization of the fleet is essential, since the secondary markets are prepared to lead the demand for new air travel," said Simon Newitt, Embraer Vice President, Commercial Aviation, Latin America. "Airlines will continue to acquire new and efficient aircraft to meet the low and medium density markets and to provide greater connectivity."

Consolidations and mergers have also contributed to fundamental changes in the aviation industry, in order to leverage synergies and focus on sustainable growth and profitability. However, some major airlines responded to the mismatch between demand and capacity - and financial losses - cutting routes and reducing capacity in an attempt to reach a more viable business environment.

The first delivery of an E-Jet in Latin America occurred in 2005, when Copa Airlines of Panama received a E190. Currently, more than 200 E-Jets are in service in the region, where Embraer is a leader in the segment of up to 130 seats jets, with 70% market share. The family of E-Jets has registered more than 1,700 applications and more than 1,200 deliveries to date. The aircraft are in service with approximately 70 customers from 50 countries.

In order to meet future demand, Embraer is bringing the E-Jets E2 market to complement the current offer of E-Jets. The company recently introduced the first E190-E2, which will enter service in the first half of 2018.



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