Surprise... Company Sees Need For Lots Of Jets
Brazilian planemaker Embraer took
the opportunity at this week's Singapore Air Show to release its
projections for commercial air traffic demand in the Asia Pacific
region and China over the next 20 years. The company expects the
Asia Pacific region to grow at an annual rate of 5.3 percent and,
particularly, China at 7.5 percent, which are well above the
projected world average of 4.9 percent -- the result of a positive
economic environment, and more accessibility to the market by new
"Embraer’s production, training and service investments
show its deep involvement in the Asia Pacific region, where the
Company has three decades of experience," said Orlando José
Ferreira Neto, Managing Director – Embraer Asia Pacific. "The
burgeoning and highly competitive aviation markets of the region
pose a challenge that we take very seriously and sharpens the focus
of our strategic planning."
Increasing openness in some countries of the region encourages
more airline expansion and start-ups, which are resulting in
stronger air transportation growth. However, Embraer notes, the
Asian fleet still concentrates on high-capacity narrowbody
aircraft... preventing the implementation of adequate air
transportation services to medium-sized cities.
Embraer expects this fact, in conjunction with an ever-growing
need to integrate secondary cities, plus new public policies, will
motivate the development of regional transportation, thus creating
major opportunities for regional aviation in the coming years.
In China, the economy is growing at a fast pace and, together
with the heavy infrastructure investments, is stimulating the
creation of privately-owned airlines, resulting in greater
competition. But the fleets are centered, mainly, on high-capacity
aircraft, which are unable to efficiently serve most medium-demand
Embraer foresees a demand for 1,270 jets in the 30 to 120-seat
segment, over the next 20 years, in the Asia Pacific region and
China, or an estimated total market value of US$ 42 billion. The
forecast, broken down into ten-year periods, shows the delivery of
610 aircraft in 2008-2017 and 660 in 2018-2027.
Embraer’s current forecast indicates that the aircraft
demand in the region will be 25 percent higher than the previous
estimates. The Asia Pacific region and China will represent 17
percent of worldwide aircraft deliveries over the next 20 years.
The studies also indicate the 30 to 90-seat segment will be the
mainstay of regional aviation development in Asia. The 91 to
120-seat segment will support airlines to right-size aircraft
capacity to market demand with improved service levels on low load
factor narrowbody flights and to expand into mid-sized markets.
The carbon emissions issue is becoming one of the main drivers
of airline fleet decisions and early retirement of older aircraft.
Around 50 percent of the 61 to 120-seat jets currently in service
in the Asia Pacific region are over 20 years old and should be
replaced in the near future, resulting in substantial environmental
and economic benefits.
In light of the data of the 20-year outlook, Embraer believes
its commercial aircraft families -- the ERJ 145 (with four models,
ranging from 37 to 50 seats) and the E-Jets (four models, from 70
to 122 seats) -- are very well positioned to capture an important
share of the present and future air transportation needs in the
Asia Pacific region and China.