Transcript EMBRAER 175/195 Overview

Commercial
Aviation
Update
Paulo César de Souza e Silva
President Commercial Aviation
Oct/2012
Forward Looking Statement
This presentation includes forward-looking statements or statements about events or
circumstances which have not occurred.
We have based these forward-looking
statements largely on our current expectations and projections about future events and
financial trends affecting our business and our future financial performance.
These
forward-looking statements are subject to risks, uncertainties and assumptions, including,
among other things: general economic, political and business conditions, both in Brazil
and in our market.
The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,”
“expects” and similar words are intended to identify forward-looking statements.
We
undertake no obligations to update publicly or revise any forward-looking statements
because of new information, future events or other factors. In light of these risks and
uncertainties, the forward-looking events and circumstances discussed in this
presentation might not occur. Our actual results could differ substantially from those
anticipated in our forward-looking statements.
Contents
 Strategic Objectives
 E-Jets Family
 Market Outlook
 Product Development
Strategic Objectives
• Leadership in the Commercial Aviation up 120 seats
• Increased results from Services and Support
 Products that satisfy market needs
(reliable, efficient, flexible, passenger
appeal/preference, performance and economics)
 Diversified customer base
 Customer base expansion through leasing companies
 Excellence in Customer Experience (ECE)
Market Leadership
Commercial Aviation up to 120 seats
Ago/2012:
Jun/2012
Orders
Deliveries
E195
134
99
E190
546
424
E175
189
153
E170
189
182
1,060+ E-Jets ordered
E-Jets Deliveries
4Q12
Mar 2004
900
First Delivery
Nov 2010
Oct 2005
Sep 2011
Dec 2006
Sep 2009
Oct 2007
May 2008
Dec 2008
Leadership in Commercial Aviation (70-120 seat jets)
Net Orders Market Share
Deliveries Market Share
9%
Sukhoi
13%
43%
Comac
Mitsubishi
1%
4%
Antonov
4%
Boeing
26%
Bombardier
34%
Bombardier
60%
3%
Airbus
1%
Boeing 1%
1%
Sukhoi
Antonov
E-Jets: since 2004
43% of orders
60% of deliveries
2012 Review
Feb:
Azul ordered more 10 E195s
(total of 57 E195s and 5 E190s contracted)
Feb:
Estonian Air transition to all-E-Jets fleet
(3 E175s+1 E190, 4 E170s in service leased from Finnair)
Mar:
First E190 delivered to Bulgaria Air
(first of 4 E190s)
Mar:
BA Cityflyer ordered another E190
(total of 6 E170s and 8 E190s)
Apr:
JAL ordered another E170
(total of 11 E170s)
First E190 delivered to the Ukrainian
Aviation Group Alliance (total of 5 E190s)
Jun:
2012 Review
China’s Hebei Airlines ordered more five
E190s (total of 7 E190s)
Jul:
Jul:
Conviasa sign a deal for up to 20 E190s
(6 orders + 14 options)
Sep:
First E175 delivered to Belavia
(2 E175s leased from Air Lease)
Sep:
First E190 delivered to Conviasa
E190 to debut in Myanmar with
Myanma Airways (2 E190s leased from GECAS)
Sep:
Oct:
TUI Travel PLC to join E-Jets family
(2 E190s leased from BOC Aviation)
Diversified Customer Base
E-Jets around the world:
60+ Airlines from 40+ Countries
Oct/2012
E-Jets Customer Base (by Business Model)
(% of E-Jets Fleet+Backlog)
2%
24%
74%
33%
19%
LCCs
33%
Full
Service
43%
Regional
48%
24%
E170/E175
E190/E195
E-Jets
E-Jets efficiency in all business models
Source: Embraer (Jun/2012)
ECE: Excellence in Customer Experience
• Airline Support
• Customer Care Center
• Customer Relationship
• Efficient Maintenance
• Efficient Operation
• Entry Into Service
• Product Robustness,
Support and Services
• MRO Network
• Parts Availability
• Product Improvements
• Product Quality
• Suppliers Management
• Training
Aircraft
Availability
Qualified
People
Global
Presence
Product
Competitiveness
ECE Projects
Customer Satisfaction
Low Operating
Cost
Highest levels of customer experience
with Embraer products and services
E-Jets Historical Financing Sources
(Deliveries)
ECA Support – E-Jets
100%
100%
100%
100%
100%
85%
73%
51%
63%
59%
62%
80%
60%
49%
40%
41%
37%
38%
27%
20%
15%
15%
21%
18%
23%
9%
0%
2004
2005
2006
2007
ECA Support
5%
2008
Mkt
2009
2010
2011
2012F
2013F
Acum ECA Support
Source: Embraer Sales Financing
E-Jets strongly supported by leasing companies
27
21
17
Yangtze River
International Leasing
12
8
3
4
1
2004
2005
2006
2007
2008
2009
2010
2011-2012
Source: Embraer, as of Jun 2012
255 Leased/SLB E-Jets in 35 Airlines
33 Leasing and financial companies supporting E-Jets
E-Jets Versatile Applications
Right-sizing of low load-factor
narrow-body flights
Natural growth for existing 50seat markets
Direct replacement of old and
inefficient jets
New market opportunities
through lower risk and increased
flexibility
E-Jets Deployment
helping airlines to be more efficient
% of Markets
Right-sizing
45%
NB Replacement
NB Complement
7%
28%
31%
Natural Growth
New Markets
Direct
Replacement
Source: OAG (1Q12)
14%
20%
E175: Delta Shuttle Services
New York (LGA) – Washington (DCA)
Frequency
Seats
Dec/08
Jun/12
15
2,058
15
1,140
MD88
MD88
MD88
MD88
MD88
MD88
MD88
MD88
MD88
MD88
MD88
MD88
MD88
MD88
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
New York (LGA) – Boston (BOS)
Frequency
Seats
Jun/12
Sep/12
15
1,890
16
1,216
A319
A319
A319
A319
A319
A319
A319
A319
A319
A319
A319
A319
A319
A319
A319
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
E175
Mar/2009: Delta shifted LGA-DCA to E175
May/2012: Delta losing $1 million per month on
Delta said that change improved its earnings on
LGA-BOS will replace A319 by E175. DL expects an
the route by $13 million annually
improvement of $20 million per year on the route
Source: OAG (1st week – Jun/2012) and Aviation Daily (May/2012)
E170/175  Helping DL to win in NY (LGA)
Delta Planned Expansion in LGA
E170/175 Only
E170/175 & Others
E170/E175:
 the right product attributes for business passengers
 ~30% (top A/C) of all DL´s markets out of LGA
Source: BofA Merrill Lynch Conf. May/2012, OAG 2H2012
Others
E-Jets on Prime Shuttle Markets
Calgary - Vancouver
E190
12x Daily
NY (LGA) - Boston
Calgary
E190
15x Daily
Vancouver
Ottawa
Toronto
Chicago
Philadelphia
Boston
NY (LGA) - Toronto
E190/E175
9x Daily
NY
Washington
Philadelphia - Boston
E190/E175
17x Daily
Ottawa - Toronto
E190/E175
8x Daily
NY (LGA) – Wash. (DCA)
E175
15x Daily
NY (LGA) – Chicago
E175
Source: OAG (1st. week – Jun/2012)
13x Daily
Market Opportunities: US Scope Relaxation
US Regional Jet Capacity Share (ASM by Segment)
AA: changes expected
in the short term
(Chapter 11)
100+ units J61-90
AA relaxation  United
potential CO scope relief
100+ units J61-90
J30-60
J61-90
29%
54%
100%
60%
61%
100%
100%
100%
100%
100%
71%
46%
2000
2011
40%
39%
2000
2011
2000
2011
2000
2011
2000
Trend towards J75  ~70% of regional capacity
Source: OAG
2011
Market Opportunities for 61-90 Seat Jets
2011 RJ50 US Domestic Operation (1.9 Million Flights)
% of Flights
Natural Growth
Opportunities
52%
40%
8%
20-29
30-39
Pax per Departure
40-49
40% of RJ50 flights with loads appropriated to 61-90 seat jets
Source: OAG / US DOT T100
Market Opportunities for 91-120 Seat Jets
2011 Narrowbody (NB) US Domestic Operation (3.4 Million Flights)
% of Flights
Right-Sizing
Opportunities (*)
Pax per Departure
34% of all NBs flights with loads appropriated to 91-120 seat jets
Source: OAG / US DOT T100
(*) Scope clauses restricting Regional Airlines operation, but some
Mainline carriers are negotiating salary rates for 110-seater
Replacement Opportunities - World
(Jets 61-120 seats)
350
Number of Aircraft
300
B737-500
250
200
B717-200
F100
B737-200
150
100
Bae 146
YAK-42
DC-9
F28
TU-134
50
F70
737-600
0
5
15
25
35
Average Age (years)
45
More than 900 aircraft older than 15 years
Source: OAG (Jun/2012 ; Passenger, Active in Service, Scheduled Services)
Projected Deliveries by Segment
32,800 new aircraft deliveries  total market value of US$ 3.6 tri*
6,795 aircraft
17305
(21%)
6185
3765
2625
2515
405
TPs
Jet 30-60
Jet 61-90
Jet 91-120
NB (121-210)
WB (201+)
Market Outlook 2012-2031
* At list price
6,795 jet deliveries by world region
(30-120 seats)
2,195 North America 32%
1,460 Europe
21%
1,005 China
15%
670 Latin America
11%
505 Asia Pacific
7%
445 Russia/CIS
7%
305 Middle East
4%
210 Africa
3%
Market Outlook 2012-2031
Competition 61-120 seats – New Scenario
Typical Seating Capacity
120
CS300
A319 NEO
737-7 MAX
110
E195
100
CS100
SSJ95/100
90
E190
CRJ1000
80
MRJ90
ARJ21
E175
CRJ900
70
CRJ700
60
E170