Embraer says it is on track to increase the production rate of its commercial and executive jets by twenty percent this year, with another twenty percent increase to follow in 2024. This is despite continued supply chain challenges.
“Our growth plan is going well. We plan a twenty percent increase for the entire company this year and we expect this growth level to remain the same next year,” President and CEO Francisco Gomes Neto replied to questions from AirInsight during today’s Q2 and HY1 results media earnings call. “Production slots for commercial and executive aviation have been filled and there is no risk of a lack of supply.”
During the call, Gomes Neto didn’t specify numbers for production rates, but the target is this year to produce between 65 and 70 E-Jets and between 120 and 130 Praetors and Phenoms. This reflects a twenty percent increase from last year when Embraer delivered 57 E-Jets and 102 executive jets. That was just below the target of 60-70 commercial aircraft, while business jet deliveries fell within the guidance of 100-110 aircraft. Last year’s deliveries were still up 12.7 up from 2021.
Increasing production/deliveries by another twenty percent next year would get the E-Jets in the range of 77-84 aircraft and executive jets between 145 and 156 aircraft. Embraer said in 2022 that by introducing the methodology from Toyota, production lead times could be reduced by forty percent which would allow for higher rates.
Gomes Neto told Reuters on Monday that commercial airplane deliveries should exceed eighty next year and return to around 100 by 2025 or 2026. This number was last reached in 2017 when Embraer delivered 101 E-Jets and 109 executive jets. Embraer has said before that these higher rates will significantly improve its financial position.
Supply chain remains challenging
That was before serious supply chain issues also confronted Embraer with delays, notably from engine manufacturers Pratt & Whitney and GE Aerospace, but also from various component suppliers. While not over, the situation has improved, said Gomes Neto:
“The supply chain has evolved since 2022. This year, we are adjusting our programs in a growing environment of about twenty percent. This is the challenge for our entire chain. We had some advances, but there are still some challenges. Engines for commercial and executive aviation are one of our bottlenecks. We are covered for this year and next year, but we are still receiving equipment with some delays.”
Gomes Neto said that the conversion of the first E190F passenger-to-freighter in Sao Jose dos Campos is going according to plan. Delivery of the aircraft is scheduled for April 2024. Of the $56 million spent on R&D in HY1, part has been used for the freighter program. He had no further updates to share about the Letter of Agreement with Chinese company Lanzhou for twenty E1-conversions, which was announced two months ago during the Paris Airshow.
