Embraer revises 2024 commercial aircraft deliveries
November 12, 2024
Despite recording increased revenues of more than 32% year-on-year in Q3 2024, with Executive Aviation and Defense & Security both up more than 65%, Embraer has revised its commercial aircraft delivery predictions for the full year 2024; believing that between 70 and 73 aircraft is a more realistic target than previous estimates of up to 80 units.
During the third quarter of 2024, Embraer delivered 59 aircraft; 41 of which were executive jets, 16 commercial jets, and two multi-mission C-390 Millennium aircraft. This total was up 26% quarter-on-quarter and 43% up year-on-year. Embraer’s firm order backlog now stands at $22.7 billion; a nine-year high and representing a new record for the company, more than 255 higher year-on-year and almost 10% higher quarter-on-quarter.
Of the executive jets delivered, 22 were light and 19 medium jets, something Embraer CEO Francisco Gomes Neto believes represents a new trend. “I do not expect executive jets going backwards…. We see the market for us normalising but at high levels,” he explained.
However, despite a modest 6% increase of deliveries within the commercial segment (with the E2 family representing 75% of these total deliveries), executive vice president and chief financial officer Antonio Carlos Garcia recognised that Embraer’s “Commercial Aircraft division is facing significant supply chain delays, mainly in the E2 assembly line”.
Neto clarified that despite having seen improvements throughout the supply chain, the company is still “facing [challenges] with a specific group of components, mainly engines and structural parts” for the E2. “We have to recognise that we are increasing the demand for engines a lot this year comparing to last year. So the problem is that we are not getting the engines on time to be able to finalise the assembling of our aircraft and deliver the aircraft to the customer,” he continued.
The impact of these challenges is mitigated, at least in part, by a number of what he called very well structured initiatives in place, such as price discipline in new sales, cost reduction initiative, production lead time reduction, expense and investment control, [and] production linearity”.
Commercial aviation production slots are blocked out until the 2026, with slots available from 2027; something Embraer is hoping to fill with its ongoing campaigns for more than 200 aircraft – remaining optimistic it can fill production slots “until the end of the decade for all the units”.
Despite these difficulties, Embraer still remains positive it can meet its currently revenue expectations of between $6-6.4 billion for the full year. “This is a benefit of having different business units where the strength of Service and Defense helps to offset some missing deliveries in Commercial Aviation, for example,” highlighted Garcia. Neto added: “Remember that our most profitable area is services. And in services, almost 40% of the services revenue comes from commercial jets”.
