Embraer presents Long Term Outlook for Airline and Business Jet Markets

Last week Embraer presented its 20-year forecast for world demand of 30 to 120 seat commercial jets as well as for the business jet market.

Airline Market

In its forecast Embraer foresees a global demand for 7,950 jets in the 30 to 120 seat capacity segment over the next 20 years. The company estimates that 3,350 aircraft will be delivered between 2006 and 2015, with the remaining 4,600 units to be delivered between 2016 and 2025. The total market value is estimated at US$ 180 billion.

Embraer's forecast indicates that the 30 to 60 seat market segment has reached maturity, but will continue to play an important role in the air transport industry, with an increased market demand for 61 to 120 seat aircraft. The growth is expected as a result of regional airlines natural growth, replacement of ageing aircraft, right-sizing requirements from network airlines and low cost carriers expansion to mid-sized markets.

Embraer projects the following deliveries by region in the next 20 years:

Business Jet Market

Embraer estimates an overall demand for 9,680 business jets over the next ten years, which is in line with the figures reported by the industry. The current forecast includes the expected worldwide demand for the very light jet segment and does not take into consideration potential demand for the new air taxi market. According to Embraer the very light jet segment is expected to reach 2,500 aircraft over the next ten years, accounting for approximately 26% of total market deliveries. Demand for the light jet segment is forecasted at 1,750 units.

Embraer recently entered the very light and light jet segments with the launch of the Phenom family. First deliveries of the Phenom 100 very light jet and the Phenom 300 light jet are expected in 2008 and 2009, respectively.

Demand for the super mid-size jet segment it is expected to reach 1,415 units, and the large jet segment at 950 aircraft over the next decade.

Delivery Forecast for 2006 and 2007

Embraer maintains its forecast to deliver 145 aircraft in 2006 and expects to deliver 150 aircraft in the airline segment, business jet segment and authorities transportation of the defense segment in 2007. This estimate takes into consideration airlines filing for bankruptcy protection, cancellations in the 50-seats segment and the growth trend of 70 to 110 seats jets.

In accordance with the new Embraer market forecast, the share of deliveries for jets of the Embraer 170/190 family is expected to increase in the coming years. These will represent, starting in 2006, more than 70% of the deliveries forecast.

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