The Brazilian airframer Embraer is looking at Latin America as a strong market for the regional and turboprops segments in the next decade, according to its 2020 Market Outlook published on December 2.
As reported previously by Richard Schuurman, Embraer sees a market for 380 jets of up to 150 seats and 130 turboprops in Latin America. The Brazilian company expects a right-sizing of the Latin American fleets to prevent overcapacity, mainly in Brazil and Mexico.
In Latin America, there are 321 Embraer aircraft operating at the moment, according to our data. Brazil has the largest number with 132, followed by Mexico with 82. Many important airlines depend on the Embraer E-jet family for its domestic operations, like Aeromexico, Azul Linhas Aereas, and the recently merged Austral in Argentina.
Moreover, the average age of the Embraer aircraft in Latin America is 13.5 years old. This means some airlines could be expected to replace their aging fleets soon.
According to Embraer, 42% of all departures in the region are operated by aircraft in the up to 150-seat category. But, as the Brazilian manufacturer also said, “in the near future, however, the large narrow body order backlog and a fleet of rapidly-aging regional aircraft will generate a mismatch between capacity and demand.”
That’s why Embraer expects that airlines will right-size their fleets to suit better the lower demand expected after COVID-19.
Mexico and Brazil
In the case of Mexico, Embraer points out its trading relationship with the US. It said that Latin American and US companies will establish new supply lines within each other and that Mexico is the logical choice for redirecting these business flows.
“However, current aircraft deployed in these markets are sub-optimal and probably not sustainable. Right-sizing is required even in markets that already have more than one daily frequency.”
Brazil will play an essential role in the economic development of the region. Embraer expects 66 airports to be built in the country, which will help economic and connectivity growth. To connect these new airports, Embraer says that an up to 150-seat fleet is ideal.
And what about turboprops?
Now, with Embraer looking at launching the E3 program in the next decade, the Brazilian manufacturer must see Latin America as a very interesting market.
Latin America will receive up to 130 new turboprops, the third-most worldwide after China & Asia-Pacific and Europe. As we wrote previously, the turboprop market should grow in Latin America, as there are many under served airports and cities across the region with underdeveloped infrastructure.
Final analysis
As expected, Embraer will push hard in the Latin American market during the next decade. There will be new airlines operating in the countries. Some of these are Ita Linhas Aereas in Brazil, Ecuatoriana in Ecuador, and Ultra Air in Colombia. These new carriers should look at Embraer’s regional aircraft offer.
Moreover, if Embraer does launch the E3 turboprop program, we should see a strong push in Latin America.
