Embraer is set to launch a full freighter conversion program of the E190 and E195 within the next six months, but it doesn’t rule out offering a new freighter either. A decision on the new aircraft program depends on the demand and could take a bit later to come, Vice President of Marketing, Rodrigo Silva e Souza said on November 15. Embraer presented its latest market forecast on the second day of the Dubai Airshow. Day 2 Dubai Airshow: Embraer plans to go full freighter.
The forecast is the first that includes freighters. Out of the 10.900 aircraft that Embraer is projecting for the 150-seater segment until 2040, 700 will be freighters. It confirms the trend that the demand for freighters is booming. Boeing announced more 737-800BCF conversions on the first day of the show and added nine 767-300BCFs from DHL Express to the order book on Monday.
The Embraer freighter will have a payload capacity of 14 tons. The OEM isn’t ready yet to launch the program as it is finalizing plans for who and where will make the conversions. Silva e Souza doesn’t rule out that Embraer will do it itself or alternatively commission the program with related MRO companies. CEO Commercial Aviation Arjan Meijer says that it will take some 24 months from the launch to deliver the first aircraft.
Embraer expects demand for 8.640 jets and 2.260 turboprops
Of the 10.900 aircraft in the forecast until 2040, 8.640 are jets and 2.260 turboprops, plus the 700 freighters, with a total value of $650 billion. This is a 20-year forecast again after only a 10-year outlook one presented in December 2020. That one included 5.500 aircraft up to 150 seats until 2030, including 4.420 and 1.080 turboprops. The cargo segment is 65 percent growth and 35 percent replacement.
The last 20-year forecast in 2019 was for 10.550 aircraft until 2038, so the latest one is up slightly higher. The difference is that Embraer now expects 43 percent to be for growth and 57 percent for replacement.
Yet, Embraer is taking into account the effect of the Covid-crisis and the revised projections of GDP growth. Instead of the 2.8 percent growth from the 2020 forecast, the airframer is now seeing it at 2.6 percent growth. RPK’s will be on average at 3.9 percent from 2025 to 2040 compared to the previous range of 3.3 to 4.4 percent.
A couple of new trends come into play. Embraer expects business travel to be down by 15-20 percent, as companies move their offices closer to where their markets are. More awareness of environmental issues also has an effect, meaning less growth and more efficiency. The translates into a smaller, more profitable airline industry. “No longer the deployment of capacity is key but efficiency for environmental and cost reasons. There is a move towards rightsizing”, said Silva e Souza. By market size, it is led by North America (29 percent), Asia (28 percent), Europe (27 percent), Latin America (9 percent), and finally Africa/Middle East (7 percent).
New order from Nigeria’s Overland Airways
One of the fastest-growing countries is Nigeria. Embraer announced an order for three firm E175 and three purchase rights from Overland Airways worth $299.4 million. The aircraft will be configured with an 88-seat premium class configuration and are delivered from 2023. They will expand the network of Overland, which until now operates an ATR-only fleet.
Embraer hasn’t planned any further announcements during Dubai Airshow.