AIRSHOW-Brazil's Embraer faces high expectations for new E-Jets

Sun Jun 16, 2013 1:00pm EDT
 
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By Brad Haynes

PARIS, June 16 (Reuters) - Brazil's Embraer SA , the world's third-largest commercial planemaker, cruises into the Paris air show with expectations mounting for the launch of its next generation of regional E-Jets, which have lifted its shares to near 5-year highs.

Chief Executive Frederico Curado is likely to lay out plans on Monday for a re-engined commercial jet lineup entering service by 2018, analysts said. After two years of studies, the planemaker is poised to overhaul the E-Jets with new wings, upgraded avionics and geared turbo fan engines from Pratt & Whitney.

The more efficient engines should help Embraer hold its recent leadership of the 70- to 120-seat segment, fending off new challengers like the Mitsubishi Regional Jet while keeping pressure on smaller versions of rival Bombardier's CSeries.

The big question is whether Embraer has the orders to launch its new lineup with a splash. On Friday, the company announced the late addition of a second airshow press conference regarding commercial jets, stoking expectations they have plenty of news to make. Embraer declined to comment on the speculation.

"At the Paris Airshow you'll see them announce probably the first firm orders for a completely re-engined and rejiggered family of (E-Jets)," said Richard Aboulafia, vice president of aviation consultancy Teal Group.

Embraer's decision to defend its current niche is "extremely smart," Aboulafia said. "The market doesn't want new fuselages or new aircraft, it wants new engines."

Industry giants Airbus and Boeing Co unlocked a torrent of fresh demand in the past two years with re-engined narrow-body aircraft, raising the bar for fuel efficiency.

Canada's Bombardier Inc, which has competed for decades with Embraer in the smaller regional jet segment, is aiming its 110- to 130-seat CSeries at the lower end of the narrow-body market, but has booked just 177 firm orders. The CSeries is an all-new jet with composite materials that is due to make its first flight later this month.   Continued...