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Embraer plans to almost double revenues from sales of its regional and business jets over the next decade but is keeping its options open on whether to launch a larger aircraft that would challenge Airbus and Boeing.
Francisco Gomes Neto, chief executive, said the Brazilian aerospace and defence company was “very focused on selling the products we have”.
“We have a very modern and competitive portfolio of products. We have the potential to be a $10bn company by the end of this decade and with our existing products,” he told the Financial Times at the Farnborough air show.
Embraer, which generated $5.3bn in sales in 2023, has been ramping up production of its commercial jets since the Covid pandemic hit global travel. It ended the second quarter with a $21.1bn order backlog, its highest in seven years. Shares in the group have soared more than 80 per cent since the start of the year.
The world’s third-largest civil aircraft manufacturer is the leading producer of regional jets, which are smaller than the narrow-body planes built by aerospace giants Boeing and Airbus.
Its latest and largest model, the E195-E2, can carry up to 146 passengers. Embraer has in the past regularly played down any interest in breaking the duopoly by entering the competitive market for single-aisle aircraft.
Industry attention over the possibility has intensified, however, amid turmoil at Boeing after the mid-air blowout of a section of one of its 737 Max aircraft in January and as Airbus struggles to ramp up output because of supply constraints.
Gomes Neto said that “while we feel good talking about Embraer as a potential to break the duopoly . . . we don’t have any concrete plans now to launch a bigger aircraft”.
However, he added, “we are always making studies in the different segments . . . in business jets, commercial and defence as well . . . We have people working on all those markets to see the opportunities we have.”
Taking on Airbus and Boeing would be a decision fraught with risk and cost billions of dollars. Industry analysts said that given Embraer’s much smaller size relative to the two large plane makers, any future move would only be possible in partnership with another company.
Embraer expects to generate $6bn-$6.4bn in revenues this year and plans to deliver 72-80 commercial aircraft and 125-135 business jets. Airbus, by comparison, expects to deliver about 770 commercial aircraft.
“We cannot yet talk about breaking the duopoly,” said Alex Dray, senior analyst at Gimme Credit. “Competing with Boeing and Airbus requires persuading customers to switch from more established companies. Embraer is still seen as a regional leader but not yet as a global one. Airbus probably has more chances to gain from Boeing’s troubles.”
Richard Aboulafia, managing director of AeroDynamic Advisory, said that while Embraer has the “expertise and customers would love it if they launched a larger jet . . . they really don’t have the cash. This represents a great opportunity for a partnership with anyone with money and patience.”
Gomes Neto said Embraer’s current line-up of E2 jets was a “great solution to complement the bigger narrowbodies”.
Airline customers, he added, “are using the E2s to open new routes, to offer a higher frequency of flights for passengers”.
The company is continuing to pursue international partnerships for its defence products, such as light attack planes and transport aircraft. It is in talks with Saudi Arabia about a broader co-operation not just on its C-390 military transport aircraft but also on its E2 regional jets and electric air taxi venture, Eve.