2004 - charleston regional jets conference
TRANSCRIPT
Frederico Fleury CuradoExecutive Vice President
Civil Aircraft
Airline Market
Trends and
Outlook
Investors Conference – Regional JetsGECAS & CITIGROUP
19-21th May,2004
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
This presentation includes forward-looking statements or statements about events or circumstances which have not occurred. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: general economic, political and business conditions, both in Brazil and in our market. The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,”“expects” and similar words are intended to identify forward-looking statements. We undertake no obligations to update publicly or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated in our forward-looking statements.
Forward Looking Statement
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
2003 FLEET IN SERVICE15,613 AIRCRAFT
NorthAmerica
37%
NorthAmerica
37%
Europe
22%Europe
22%
Latin America & Caribbean
7%
Latin America & Caribbean
7%
Africa & Middle East
7%
Africa & Middle East
7%
Asia/ Pacific
21%
Asia/ Pacific
21%
China
6%China
6%
Scheduled airline services - Capacity share % by region
Source: OAG (Jan/2004), Fleet PC (Dec/2003)
2442Regional
3339Single Aisle
634Twin Aisle
578Regional
631Single Aisle
85Twin Aisle
329Regional
509Single Aisle
327Twin Aisle
783Regional
893Single Aisle
1043Twin Aisle
113Regional
481Single Aisle
88Twin Aisle
1256Regional
1516Single Aisle
566Twin Aisle
Regional80993363Total Fleet 8664Single AisleTwin Aisle Regional73692743Total Fleet 5501Single AisleTwin Aisle
Global Airline Market Today
OBS.: Regional considered up to 100 seats
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Scheduled airline services (aircraft from 19 up to 120 seats):Capacity share % by region
NorthAmerica54%
NorthAmerica54%
Latin America
& Caribbean
6%
Latin America
& Caribbean
6%
Europe
26%Europe
26%China
2%China
2%Africa &
Middle East
4%
Africa &Middle East
4%Asia/
Pacific
8%
Asia/Pacific
8%
Source: OAG (Jan/2004), Fleet PC (Dec/2003)
Airline Market Today – Up to 120 Seats
80993363Total Fleet Single AisleTwin Aisle 36832979Total Fleet Regional JetTurboprop
811Jet
691Turboprop
1913Jet
934Turboprop
342Jet
422Turboprop
233Jet
243Turboprop
311Jet
532Turboprop
73Jet
64Turboprop
2003 FLEET IN SERVICE6,662 AIRCRAFT
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Regional Airlines
Major Airlines
RASK
/
M
Capacity
Low Cost Carriers
Current Airline Business Model
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
0
200
400
600
800
1,000
1,200
1,400
1,600
2000 2001 2002 2003E 2004F 2005F 2013F
Majors Low Costs Regionals
US Domestic RPM (Billion)
...
Source: WATS, Embraer
Traffic Recovering Slowly
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
60
80
100
120
140
160
180
200
Jan-0
0
Apr-00
Jul-0
0
Oct-0
0
Jan-0
1
Apr-01
Jul-0
1
Oct-0
1
Jan-0
2
Apr-02
Jul-0
2
Oct-0
2
Jan-0
3
Apr-03
Jul-0
3
Oct-0
3
Jan-0
4
Majors Low Cost Regional
Source: EMBRAER
US Domestic ASM Evolution (Index 100)
Shifting Capacity Among Business Models
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Share of US Domestic RPM
US Airline Industry Evolution
85%78%
69%
52%
3% 5% 8%19%12%
17%22%
29%
0%
20%
40%
60%
80%
100%
1995 2000 2003E 2013F
Majors Low Costs Regionals
...
Source: WATS, Embraer
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Share of Intra-European RPKs
Source: AEA, ERA, ATI, Embraer
Low Fares: easyJet + Go + Ryanair + VirginExpress + Buzz + DBA
85%77%
68%
48%
14% 16% 19% 21%1%
6%13%
31%
0%
20%
40%
60%
80%
100%
1995 2000 2003E 2013F
Majors Low Costs Regionals
...
European Airline Industry Evolution
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Source: Back Fleet pc
Sales orders pattern is changing
Airbus & Boeing - Orders by Year
162251
43133
48
301271
479530
511
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1999 2000 2001 2002 2003
LOW COST OTHERS
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
0
10
20
30
40
50
60
2001 2002 2003
ASM - (Billion)
50%
55%
60%
65%
70%
75%
2001 2002 2003
Load Factor
US Regional Airlines Statistics
Source: EMBRAER
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Europe Regional Airlines Statistics
Source: EMBRAER
10
20
30
40
50
60
70
80
90
2001 2002 2003
ASK - (Billion)
50%
55%
60%
65%
2001 2002 2003
Load Factor
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
0
40
80
120
160
200
2001 2002 2003
ASM - (Billion)
50%
55%
60%
65%
70%
75%
80%
2001 2002 2003
Load Factor
US Low Cost Carriers Statistics
Source: EMBRAER
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
0
10
20
30
40
50
2001 2002 2003
ASK - (Billion)
50%
55%
60%
65%
70%
75%
80%
85%
2001 2002 2003
Load Factor
Europe Low Cost Carriers Statistics
Source: EMBRAER
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
400
420
440
460
480
500
520
2001 2002 200350%
55%
60%
65%
70%
75%
80%
2001 2002 2003
ASM - (Billion) Load Factor
US Airline Industry – Majors
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Europe Airline Industry – Majors
255
265
275
285
295
2001 2002 2003
ASK - (Billion)
50%
55%
60%
65%
70%
2001 2002 2003
Load Factor
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Source:
10
11
12
13
14
15
16
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Yie
ld (
US
¢/R
PM
)
1998 1999 2000 2001 2002 2003
US Domestic Yields Showing Little Progress
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Source: Back Form41
2000 – 2003 (Sep)
-12000
-10000
-8000
-6000
-4000
-2000
0
2000
4000
6000
2000 2001 2002 2003
US
$ (m
illio
n)
Major Low Cost Regional
US Airline Industry Operating Results
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Source: SEC and Company Reports
Airlines - Some Operating Results
US$ Million
Oper. Income
Oper. Margin
Oper. Income
Oper. Margin
American (1,129.0) -6.5% (3,313.0) -20.7% 65.9%United (1,360.0) -9.9% (2,837.0) -19.9% 52.1%Southwest 483.0 8.1% 417.0 7.6% 15.8%JetBlue 168.8 16.9% 105.0 16.5% 60.8%ExpressJet 182.0 13.9% 101.0 13.6% 80.2%Skywest 108.5 12.2% 119.6 15.4% -9.3%Air France 533.0 3.4% 353.9 2.6% 50.6%British Airways 371.2 2.8% 678.8 5.3% -45.3%Iberia 182.8 3.5% 236.7 5.3% -22.7%Ryanair (Apr/02-Mar/03) 332.0 31.3% 171.1 26.1% 94.0%
2002Airlines
2003 Oper. Income% (YoY)
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Current down cycle more a fundamental correction than just a cycle
• Yields will remain low as long as LCC’s continue to set the bar in the
market
• For the 1st time in history RPM showed three consecutive years of
negative evolution
• Major airlines with significant value depreciation and attempting to re-
invent themselves
• Shift in capacity among business models, from majors to LCC’s and
regionals (largely used as defensive weapons by the majors)
• Growth of point-to-point services vis-à-vis hub and spoke
• Untapped 70-110 seats typical E-Jets markets will help to significantly
intensify the competitive scenario
A Cyclical Industry, but …
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
When markets are strong…
RJs expand catchment areas by adding more spokes to carrier hubsin addition to:
• supplementing mainline jet capacity
• increasing route frequency
• opening new “long & thin” routeswith small, low-risk capacity
• introducing secondary-to-secondary market service (EU)
Regional Jets – Still a Dynamic Tool
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
• rightsizing aircraft capacity with demand
• maintaining high route-frequency
RJs help to defend an airline’s competitive market position by:
… and when markets are weak
• preserving network integrity and overall market presence
• replacing unprofitable mainline jet capacity service
Regional Jets - A Dynamic Tool
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Jan 2004 – 2224 Routes
Jan 1995 – 76 Routes
Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)
Regional Jets Network - USA
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Jan 2004 – 1134 Routes
Jan 1995 – 104 Routes
Source: Back OAG (ERJ-145/140/135, CRJ-100/200, 328Jet routes)_Feb2004
Regional Jets Network - Europe
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Jan 1995 – 2,908 routes
Jan 2004 – 1,580 routes
Turboprop Networks – USA
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Jan 1995 – 1918 routes
Jan 2004 – 1898 routes
Source: BACK OAG_Feb2004
Turboprop Networks - Europe
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Source: Back – OAG Data, Feb2004
RouteEquipment M80 100 ERJ M80 ERJ M80 100 ERJ
92 32 0 93 0 88 32 0
0 116 66 0 151 27 120 5
0 0 187 0 160 0 0 185
Jan
03Ja
n 04
SYR-ORD BUF-ORDROC-ORD
Jan
02
Narrowbody Jets Replacement (Rightsizing)
Number of monthly frequencies
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Turboprop Retirement
Source: Back – OAG Data, Feb2004
RouteEquipment SF3 ERJ SF3 ERJ SF3 ERJ
182 0 231 0 110 108
139 0 144 31 137 27
0 87 0 140 0 126
Jan
04
BOS-ISP BOS-BGR BOS-PHL
Jan
01
Jan
02
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
EqpDays of
OperationDeparture Origin Arrival Destination
Duration (min)
ER4 xSaSu 8:20 MAN 9:15 EDI 55ER4 xSaSu 11:55 MAN 12:45 EDI 50ER4 xSaSu 14:40 MAN 15:30 EDI 50ER4 xSaSu 17:30 MAN 18:25 EDI 55ER4 xSa 20:20 MAN 21:10 EDI 50ER4 xSaSu 07:00 MAN 7:55 EDI 55ER4 xSaSu 08:55 MAN 09:50 EDI 55ER4 xSaSu 12:15 MAN 13:15 EDI 60ER4 xSaSu 17:00 MAN 18:00 EDI 60ER4 xSaSu 19:55 MAN 20:50 EDI 55ER4 xSaSu 07:00 MAN 08:00 EDI 60ER4 xSaSu 08:55 MAN 09:50 EDI 55ER4 xSaSu 12:05 MAN 13:00 EDI 55ER4 xSaSu 17:00 MAN 17:55 EDI 55ER4 xSaSu 19:55 MAN 20:50 EDI 55
Janu
ary
20
02Ja
nuar
y 20
03Ja
nuar
y 20
04
Source: Back – OAG,Feb 2004
High Frequency Services
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
EqpDays of
OperationDeparture Origin Arrival Destination
Range (Km)
M80 daily 07:00 DUS 08:35 MXP 644ER4 daily 11:45 DUS 13:20 MXP 644ER4 daily 16:10 DUS 17:45 MXP 644ER4 daily 20:35 DUS 22:10 MXP 644
319 daily 07:00 DUS 08:30 MXP 644319 daily 11:45 DUS 13:15 MXP 644ER4 daily 17:30 DUS 19:05 MXP 644ER4 xSa 19:45 DUS 21:20 MXP 644
319 daily 07:10 DUS 08:45 MXP 644319 daily 12:10 DUS 13:45 MXP 644319 daily 17:30 DUS 19:05 MXP 644ER4 xSa 19:45 DUS 21:20 MXP 644
Jan
uar
y 20
02Ja
nu
ary
2003
Jan
uar
y 20
04
Source: Back – OAG Data, Feb 2004
Routes Development
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
37 Seats
44 Seats
50 Seats
50 Seats (2,000 nm range)
Responding to Market Needs
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Roll-out Ceremony
First Chinese made ERJ-145
Dec 16th, 2003
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
480 59 33 21 15 14 8 5 3129
61% 16%
… 550 ROUTES (70%) are under 120PDEW
PDEW
China - PDEW vs. Frequency
Daily Frequency
FROM 786 DOMESTIC ROUTES …
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
• Improved Service
• Profitable Load Factor
Low LFLow Frequency
Low Freq.Medium High LF
RJ provides the right solution for the thin Traffic Routes A
dd
Fre
qu
ency
Rightsizing
Y2002 - 550 Domestic Routes with PDEW < 120Frequency /day
LF
China – Opportunities for RJ
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
189
152
20
17
FirmBacklog
7241,375462913Total
5451,137440697ERJ 145
741142094ERJ 140
1051242122ERJ 135
DeliveriesTotalOptionsFirm(as of 1st quarter 2004)
ERJ 145 Family Orderbook
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
• Labor Relationships• Partnership shareholders / management / employees
• Competitive compensation systems / higher productivity
• Fare Structure• Simplified fare structures
• Low fares stimulating demand
• High load factors
• Cost Leadership• Low operating costs (labor, overhead and distribution costs are the key factors)
• Lean, agile structure and operations
• Highly flexible and dynamic route structure• Intense focus on O&D traffic opportunities
• Aggressive new market development (E-Jets the next frontier)
• High aircraft daily utilization / low TAT’s
• Agressive yield management
The Challenge posed by the Low Cost Carriers
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Source: BACK OAG Feb/2004
1995 - Southwest, Airtran and Frontier 2004 - Southwest, Airtran, Frontier, Jetblue, America West, Alaska, ATA, Spirit
Jan 2004 – 1375 Routes
Jan 1995 – 336 Routes
Low Cost Carriers Network - USA
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Source: BACK OAG (Ryanair, easyjet, Buzz and GO)
Jan 1995 – 18 Routes
Jan 2003 – 374 Routes
Low Cost Carriers Network - Europe
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Markets between 150 and 500 PDEW (USA)1,098 markets
These 1,098 marketsare predominantly
served by either B737/ A320 or 50 seat jets
B 757/737 A319/320/321
50 seat Jets
105 PDEW = 50 seater x 70% LF x 3 Frequencies
500 PDEW = 240 seater x 70% LF x 3 Frequencies
Source : DOT OD1A Data Q2 2002
LCC Moving Downwards in Capacity
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1,098 markets
105 PDEW
500 PDEWupper boundary for a B737/757 or A320/321
lower boundary for a 50 seater
28%
Over 500 markets are better suited for a 70-
110 seat aircraft48%
24%
315 PDEWlower boundary for a B737 or A319/320
150 PDEWupper boundary for a 50 seater
Source : DOT OD1A Data Q2 2002
LCC Moving Downwards in Capacity
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Market Opportunities - Australia
125 markets
More than half of the markets above 25 PDEW could bemore efficiently served with 70-100 Seaters
Almost 70 markets are better suited for a 70-100 seat
aircraft
53%
25 PDEW
8300 PDEW
315 PDEW
50 PDEW
30% 37 markets are suited for 35-50 seaters
16%20 markets are suited for a
mixed fleet operation
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• Reorganization under or out of Chapter 11 protection
• Revision of labour contracts
• Reduction of fleet types
• Renegotiation of old leases
• Turboprop retirement
• Deferral of new (big) aircraft deliveries
• Downsizing of several routes to smaller equipment
• Intensification of the use of regional aircraft as defensive tools
• Some LCC initiatives
Majors are reacting – focus in cost reduction
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
4 8 13 13 8 7 5 2 220150
5
10
15
20
25
50 60 70 80 90 100 110 120 130 140 >150
%
35% of flights depart with loads more appropriate for 90-110 seat
aircraft
25% of flights depart with loads more appropriate for a 70-90 seat
aircraft More than half of the domestic flights in the US are better
suited for 70-110 seat aircraft. Excess capacity translates into empty seats, higher operating
costs and unprofitability
Source: Back (US DOT T100)
Opportunity for Right Size – Aircraft Capacity
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
0
5
10
15
20
25
50 60 70 80 90 100 110 120 130 140 >150
%
2000200120022003
Source: Back (US DOT T100)
Demand x capacity mismatch not a new phenomenon
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
58%
27%
10%4%
1%
0 - 0,5 0,5 - <2 2 - < 5 5 - <10 >=10
Average Daily Frequency
Cit
y P
air
s
Rightsizing and Frequency IncreaseAverage Daily Frequency by City-pair (World)Routes operated exclusively by Jet Aircraft from 91 – 175 seats up to 2000 nm
Source: OAG (Feb/2004)
9392 city pairs with less than 2 average daily frequency
Market Opportunities - Global
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RJs Natural Growth . . . . . . Majors Airlines aircraft rightsizing and services enhancement.
E- Jets
Regional Jet Model
Major Airline Model
RASK
/
M
Capacity
Low CostModelE-JetsE-Jets
Beyond the Current Model...Expand LCC air services to secondary cities . . .
There is a need for a new TOOL
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
• Natural evolution of 50 seat market
• Tapping an existing gap
• Enhancing services (frequency)
• Low risk for demand stimulation
• Improving network deployment (capacity and range)
• New markets opportunities (long and thin routes)
• Replacing old narrowbodies
• Blurring the line between regional and mainline operations
Regional Jet Model Major Airline Model
Low CostModel
E-JetsE-Jets
The Next Step in the Industry
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
“Maximize Profits by Right-sizing your Fleet
in the Untapped 70-110 Seat Market”
1. Use the right aircraft family for the mission:
• Minimize spill
• Maximize yield and load factors
• Improve network deployment
2. Provide mainline service operating aircraft with mainline characteristics at RJ operating costs and flexibility:
• Minimized DOC through use of new technology and family concept
• Optimized comfort, range and performance
• 21st century economics to match 21st century yield trends
The Rule of 70-110
Visit
www.ruleof70to110.com
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Engineering Ergonomics Economics Efficiency
Mainline, Mid-Size or Regional?
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
Seat Capacity
120
160
40
80
Stage Length (nm)
200 400 600 800 1000 1200 1400 . . .
30 Seat Tprops
50 SeatERJ 145
Narrow Body Large Aircraft
37 - 44 Seat ERJ 135/140
EMBRAER 170/190 Family
E xperience
E ntertainment
E asy
E nhance
E xpress
E verywhere
E xcellence
E xceptional
E nvironment
E mbraer
Engineering Ergonomics Economics Efficiency
Introducing the E- Jets
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Feb 9th, 2004
EMBRAER 190 RollOut Ceremony
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EMBRAER 190 First Flight – 12th March, 2004
Taking off . . .. . . Smooth Flight . . .
. . . Landing
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
EMBRAER 170/190 Family Orderbook
250
15
110
125
FirmBacklog
8600342258 (*)Total
-453015EMBRAER 195
-260150110EMBRAER 190
8295162133EMBRAER 170
DeliveriesTotalOptionsFirm(as of 1st quarter 2004)
(*) Does not include Air Canada’s 45 firm + 45 options order for EMBRAER 190’s
Airline Market
Forecast
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
World (30-120 seat segment): 8,450 jets (US$180 billion)
World Deliveries by Segment - Jets
4,750
1,700
1,600
1,450
2014 - 2023
8,450
2,950
2,900
2,600
2004 - 2023
3,700 (*)TOTAL
1,25091 – 120
1,30061 – 90
1,15030 - 60
2004 - 2013Segment
Market Forecast 2004-2023
(*) Open demand àà approximately 2,900 a/c
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
AsiaPacific
4806%
AsiaPacific
4806%
China
635
8%
China
635
8%
USA, Canada& Caribbean
4,740
56%
USA, Canada& Caribbean
4,740
56%
30 - 120 Seats: 8,450 Jets
Europe,
Middle East
& Africa
1,970
23%
Europe,
Middle East
& Africa
1,970
23%Latin
America &Caribbean
625
7%
LatinAmerica &Caribbean
625
7%
Market Forecast 2004-2023
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