Production 'Cadence' Stabilizes, Planemaker Says

Embraer released the figures on its aircraft deliveries and order book Friday, updated to the end of the third quarter of 2008.

Based on the first three quarters of 2008, when it delivered 45, 52, and 48 jets, respectively, Embraer shows a steadier production process, which represents a 34% increase over the same period in 2007 -- when the Company delivered 108 jets.

Embraer reaffirmed its estimate of delivering 195 to 200 aircraft in 2008, plus 10 to 15 Phenom 100s. In 3Q08, Embraer delivered 37 jets to the commercial aviation market, nine executive jets, and two aircraft to the defense segment and government segment.

The Company's firm order backlog came to US$ 21.6 billion in 3Q08, an increase of 4.3 per cent over the previous quarter.

In the third quarter, Embraer announced 13 new commercial aircraft sales, including 12 Embraer 190s (five to China's Kun Peng, five to Austria's NIKI, and two to LAN, of Mozambique), and one Embraer 195 to Montenegro Airlines. Embraer also unveiled 17 Embraer 190 sales that were included in the backlog as "undisclosed customer": 12 for Aeroméxico and another five to NAS Aviation.

The list of new operators was joined by China's Kun Peng, TACA Airlines from El Salvador, Petroecuador, and Virgin Nigeria. Furthermore, in line with contract clauses, US Airways did not confirm five firm orders, which then became purchase options.

On the darker side of the sales ledger, three ERJ 145 aircraft were not delivered to Grand China Express, a company of the HNA Group from China, due to a reduction in the growth of its fleet. The company says new delivery dates and quantities are now being negotiated... and the flow of deliveries for Embraer 190 aircraft to the same customer continues unaltered.

New executive jet orders in the period included two Legacy 600s to K2 SmartJets, one Lineage 1000 to Royal Jet (representing the Al Habtoor Group, from the United Arab Emirates), and three Phenom 300s to Ireland's JetBird. The number of firm orders for the Phenom family surpassed 800 aircraft, and the Phenom 100 continues on schedule with its program for being certified in the fourth quarter of 2008.

In the Defense and Government segment, Embraer announced contracts for three EMB 145 AEW&C (Airborne Early Warning and Control) jets for the Indian Government, and 12 Super Tucano aircraft to the Chilean Air Force.

Embraer says its progress in implementing lean manufacturing processes throughout all of its divisions "continues to contribute towards establishing a more constant production cadence and meeting delivery commitments, making it possible to keep aircraft coming off the line and to achieve more solid financial planning and a more stable cash flow."

FMI: www.embraer.com