On the second day of the Dubai Airshow 2021, Embraer took significant steps to put the pandemic behind it and rethink a future of growth with a focus on sustainability. The company abandoned the 10-year market forecast it had used during the COVID-19 crisis and reinstated a two-decade forecast, seeking to demonstrate confidence and readiness for a whole new world
The company indicated that it is projecting a 3.9% increase in demand by 2040. Prior to COVID, global GDP growth was expected to be 2.8% and now it is 2.6% for 2021. In this context, the company believes that the industry will need 10,900 Embraer aircraft, with 77% of them equally distributed among the United States, Europe, and Asia, the most important markets in terms of passengers transported. The remaining markets will take that 10%, a not inconsiderable 1,100 aircraft.
The manufacturer sees a clear trend of reduction in the number of business passengers since with the explosion of teleworking, 20% of these travelers have discovered that the remote mode meets their business needs with no need to travel. In a more macro aspect, Embraer sees that companies will rethink their supply chain, which will bring them closer and regionalized.
Based on these trends, Embraer believes in «granular demand»: Smaller, more cost-effective fleets that can better weather economic/industry disruptions will be needed. There will not be as much room for ultra-capacity aircraft, and the relevance of aircraft up to 150 seats is expected to increase.
E-commerce will also play a dominant role in the future: increased cargo operations on smaller aircraft, to ensure same-day delivery and last-mile logistics, will be an important industry driver. The company believes there is a potential market for the E-Jets/E2 series pacing that need, with 64% of demand going to new units and 35% focused on the refurbishment of other freighters.
The company continues the trend of sustainability of new developments: beyond the Energia Family, the intention is to launch a fully SAF-compliant 50-seat turboprop regional aircraft in 2022, as they see interest from the US operators to replace their current fleets, a market of approximately 600 aircraft.
In summary, Embraer sees a future with diminished expectations compared to the pre-pandemic scenario. A smaller industry in which the overall profitability of companies will decline, but in which there will still be room for innovative initiatives to improve economic efficiency. A greener industry, even if flying is a bit more expensive.
Facing the future until 2040 with these ideas, Embraer is showing that it is present and wants to be a major player in aviation. We hope that this forecast will be fulfilled, and if possible, surpassed.
