Embraer predicts challenge to Boeing and Airbus duopoly

{"text":[[{"start":12.2,"text":"Rising demand for commercial aircraft will create space for rivals to challenge the Airbus-Boeing duopoly, according to the chief executive of Brazilian planemaker Embraer."}],[{"start":23.85,"text":"Francisco Gomes Neto said he saw the potential for new competitors to produce narrow-body jets, which at present are only built by the European and US companies."}],[{"start":36.28,"text":"“When I look at the projections for the next 20 years, we see an opportunity for 40,000 aircraft in that segment,” he told the Financial Times at the company’s headquarters in São José dos Campos. “That’s a lot. I think there is room for more than two manufacturers, right? I mean, maybe three or four.”"}],[{"start":58.22,"text":"Embraer is the world’s third-biggest planemaker and dominates the smaller regional jets that carry fewer than 150 passengers, although its output is far behind industry giants Airbus and Boeing. "}],[{"start":72.8,"text":"The $10.4bn-valued group has been studying options for the next generation of its commercial and business jets but Gomes Neto said a decision was not due until the next decade at the earliest because it was focused on selling existing products. Embraer’s latest and largest model, the E195-E2, can carry up to 146 passengers."}],[{"start":102.24,"text":"Recent crises at Boeing and late deliveries of aircraft from both the US manufacturer and Airbus amid persistent supply chain problems have fuelled talk of whether Embraer might be tempted to enter the single-aisle market."}],[{"start":117.13,"text":"Gomes Neto said some of Embraer’s customers “say that they would like to have more options”. However, he cautioned that there was a “big gap” between saying something and buying something. "}],[{"start":129.56,"text":"Ron Epstein, a Bank of America analyst, believes there is a case for Embraer to develop a larger aircraft."}],[{"start":137.5,"text":"“The big question for them is strategically what do they do next?” he said. “Look out over the next 20 years at demand for commercial aircraft and I think almost for sure there’ll be room for a third player,” he added, noting that Boeing’s crises had reminded airlines that “having another player in the market is good for everybody”."}],[{"start":159.5,"text":"Embraer, Epstein said, was one of the few companies that could “bring a new product to market relatively cost-effectively”."}],[{"start":167.83,"text":"Gomes Neto’s comments echo those of executives at Boeing and Airbus, who have said no decisions on whether to launch a new single-aisle jet are imminent. Both are focused on delivering on orders for their existing narrow-body models — Airbus’s best-selling A320 family of jets this week overtook Boeing’s 737 as the most popular commercial aircraft in history by deliveries, according to industry data."}],[{"start":199.28,"text":"Industry executives believe China’s Comac is the most likely to disrupt the dominance of Boeing and Airbus. The state-owned company launched its first domestically made airliner, the C919, in 2023 and its customers include the country’s three biggest carriers as well as a few overseas airlines."}],[{"start":221.17000000000002,"text":"Going head-to-head with Airbus and Boeing would be a risky endeavour for Embraer. A past attempt by Bombardier to break into narrow bodies almost proved ruinous, leading the Canadian manufacturer to withdraw from commercial aircraft production and focus on business jets. "}],[{"start":241.41000000000003,"text":"Gomes Neto said Embraer would not want to put the company’s “financial health” at risk. Embraer plans to almost double revenues from its existing regional and business jets, with a target of reaching $10bn by the end of this decade. "}],[{"start":258.70000000000005,"text":"The company is enjoying strong demand for its regional jets despite being subject to the Trump administration’s baseline 10 per cent import tax in its biggest market. It successfully lobbied Washington for an exemption from the additional 40 per cent tariff imposed on Brazil two months ago, with Gomes Neto meeting the US treasury, commerce and transportation secretaries to press its case. "}],[{"start":287.75000000000006,"text":"Even so, Gomes Neto said the 10 per cent duty would add about $80mn in costs to the group, chiefly resulting from the import of parts for its private jets that are assembled in Florida. He expressed optimism that the remaining tariff would be removed from Brazilian aerospace goods. Adjusted half-year earnings before interest and tax were $253.8mn."}],[{"start":315.6000000000001,"text":"Embraer has not been immune from the industry’s supply chain challenges. Gomes Neto said deliveries of components such as engines and fuselage parts were still delayed but that the situation was improving, and the company was still on track to reach 100 commercial aircraft deliveries per year by 2028."}],[{"start":340.05000000000007,"text":"He added that the group was pursuing several international sales opportunities for its regional jets, including in India. "}],[{"start":null,"text":""}],[{"start":348.0400000000001,"text":"The company is also seeking to boost overseas sales of its military products, including the KC-390 Millennium tanker-transport aircraft, and hopes to benefit from higher military spending from Nato countries. Eight European countries have so far ordered the KC-390. "}],[{"start":368.7300000000001,"text":"Embraer is working on plans to assemble the KC-390 in the US as part of a bid to win a contract with the US Air Force for the Next Generation Air Refuelling System programme. "}],[{"start":383.07000000000005,"text":"Separately, Gomes Neto said he expected the company’s electric air taxi, Eve, to enter commercial service by the end of 2027. The subsidiary, which is seen as a key potential growth area for Embraer, is among several companies developing battery-powered aircraft that can land and take off vertically to take passengers on short-range trips."}],[{"start":418.54,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1760316822_4899.mp3"}