Embraer Releases Biz Av Forecast

Embrear still sees a dramatic growth in for the business aviation market, according to its global forecast, released last week during its annual Embraer Day with analysts and investors at Sao Jose dos Campos Brazil.

Embraer forecasts a global demand of 11,880 business jets for 2009-2018, which could generate approximately $204 billion in new aircraft deliveries. The new air taxi and branded charter market may add yet another 1,800 to 2,800 jets to the personal and entry level segments for the same period.
Since 2006, the industry has posted consecutive delivery records, largely supported by the growing demand from non-U.S. markets, but deliveries are expected to slow down, in 2009, with a market adjustment in the 2009-2012 period. Despite the reduction in short-term deliveries, long-term sustainable growth is foreseen for the business jet market, from a return of economic growth, albeit at more conservative levels.

Launched in 2005, the Phenom 100 and Phenom 300 jets are positioned in the entry level and light segments, respectively. The Phenom 100's maiden flight occurred on July 26, 2007, and the model has already accumulated over 1,300 hours of test flights for certification, which is expected by the end of the 2008. Ten Phenom 100s are expected to be delivered to North American customers this year. The first flight of the Phenom 300 occurred on April 29, 2008. The flight test campaign for certification moves steadily ahead, and is expected to be concluded in the second half of 2009.

In May 2006, the company launched the Lineage 1000, an ultra-large executive jet based on the platform of the ERJ 190 commercial jet. The first airplane took its maiden flight on October 26, 2007. Today, four jets are in the final interior assembly stage. Certification and the first delivery of this model will occur by the end of 2008.

The Legacy 500 midsize and Legacy 450 midlight business jets were launched in May of this year, and should enter service in the second half of 2012 and 2013, respectively. The Legacy 600 continues to increase it market share, currently 15% in the super midsize category, and now has over 150 aircraft operating in 23 countries.

Embraer is investing over $100 million in the infrastructure and organization for customer support and services. In 2008, three new company-owned service centers were inaugurated in Connecticut, Arizona and Florida. The service network includes 45 centers, including seven wholly owned facilities. Embraer CAE Training Services (ECTS), a joint venture between Embraer and CAE for training Phenom jet operators, has already completed the instructional program for the first mechanics and customer pilots. The ECTS training center in Europe, located in the United Kingdom, will begin operations in the first half of 2009. Embraer has also invested in replacement parts inventory and logistics, as well as in expanding its maintenance programs for executive jets. Embraer Executive Care (EEC), a comprehensive by-the-hour maintenance program, is now available to Phenom jet customers.

The acceptance of the Phenom, Legacy and Lineage executive jets, and the continuous progress of their respective development programs has resulted in a current firm order backlog of $7 billion, which is a significant increase over previous years ($4 billion, at the end of 2007, $2 billion, in 2006, and $600 million, in 2005). Firm orders for the Phenom 100 and Phenom 300 stand at over 800 units.

Delivery and Investments Forecast for 2009
Embraer has revised its estimated aircraft deliveries for 2009, and expects to deliver 270 jets for the commercial aviation, executive aviation and defense and government (state-owned airlines and transportation of government officials) segments. The Company has also released its investments forecast for 2009, totaling US$ 450 million. On September 30, 2008, Embraer had a workforce of 23,745 employees and a firm order backlog of US$ 21.6 billion.