DUBLIN—Embraer is beginning 2023 with a substantial new order for its Embraer E195-E2 jets.
The order has been signed by an undisclosed customer and is added to the backlog for the fourth quarter of 2022.
“We see a significant amount of activity,” Embraer President and CEO Commercial Aviation Arjan Meijer said on the sidelines of air finance conferences in Dublin Jan. 17. While the U.S. market remains “tough” because of the shortage of pilots particularly affecting regional airlines, Meijer sees surging interest in Asia at large, China and Africa. In Europe, he anticipates demand for replacement of large first-generation Embraer aircraft to grow significantly soon.
One of the largest fleets to be replaced is at Lufthansa Group, spread across several of its subsidiaries including Air Dolomiti, Lufthansa CityLine and Austrian. The three carriers operating a total of 44 E1s, according to Aviation Week Network’s Fleet Discovery database. Lufthansa’s planned takeover of ITA Airways changes the competitive dynamics for regional manufacturers. ITA has opted for the Airbus A220 and not the E2, increasing Lufthansa’s future exposure to Airbus even further. Subsidiary Swiss also has a large fleet of A220s. In addition to the E1s, Lufthansa Group over time also has to replace a fleet of Mitsubishi CRJs, of which CityLine operates 28. Lufthansa has not issued a formal request for proposals (RFP) yet, but CEO Carsten Spohr recently indicated that it is moving toward it.
According to Fleet Discovery, Embraer has a backlog of 201 firm orders for the E190-E2 and E195-E2, not including the latest deal. Sales have been sluggish for a number of years since the type was introduced in 2018. The coronavirus pandemic dented demand, but Meijer also pointed at the fact that the E1 in-service fleet was too young to be replaced when the E2 became available.
The company is disclosing 2022 deliveries only at the end of March. It told the market previously that it anticipated delivering 60 to 70 aircraft in 2022. But Meijer hinted that Embraer wants to “grow steadily from where we are today.” Embraer delivered 90 commercial aircraft in 2018 and 89 in 2019.
Growing output will be challenging, at least in the near term, as the Brazilian OEM continues to be affected by supply chain delays, particularly by engine manufacturers but also other types of equipment. Meijer believes the situation will not change in the first half of 2023, though it might “improve slightly” in the second half.
Embraer’s main 2023 airline customers include Brazil’s Azul, the Netherlands’ KLM, and Canada’s Porter Airlines, which began taking delivery of E2s at the end of 2022. According to Meijer, Embraer has no open production slots in 2023 and only a few remaining in 2024.
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