Embraer sees softening jet demand in emerging markets


Ordos China-based Phenom 300 B-9699

Embraer is seeing less demand for private jets in emerging markets.
Ordos China-based Phenom 300 B-9060

The only Phenom based in China: Phenom 300 B-9060 (Photo: Alud Davies)

Frederico Curado, president and CEO of Embraer, has said that the Brazillian aircraft manufacturer is seeing less demand for business jets in emerging markets. He was speaking during an investor relations call following the release of Embraer’s second quarter 2014 financial results.

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Curado identified Brazil and China as countries where Embraer is seeing less demand.

Brazil is the second largest market for the manufacturer outside of the US.

Curado said that the softening in Brazil, is “part of the whole macroeconomic scenarios and uncertainty; we have elections coming up in a few months. So, it’s not only airplanes, it’s not only higher or lower segment, it’s across all economy. So there is a caution let’s say sentiment.”

But while the softening of demand in Brazil can be seen as economic uncertainty due to possible impeding political changes, China’s softening says Curado, is due to a sentiment in the country about luxury goods.

Curado sees the softening in China having an effect on Embraer sales within the country in the short term, but believes it will pick up in the long term due to the size of the market. “The potential demand is so strong that there is simply no way that this thing will be there forever. So how long that’s going to rush out, I don’t know.” says Curado.

Embraer delivered two flagship Lineage 1000s into China during the second quarter, the only Lineage 1000s to be delivered so far this year.

Embraer have a number of Legacy 600 and 650 private jets operating in the country, along with one Phenom 300 that is based in Inner Mongolia.

Curado noted that the US “remains slow”, but is “getting stronger”.

Embraer delivered 49 private jets during the first half of 2014, and increase of 19.5-percent over the same period in 2013.

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