Despite deep market penetration that the world’s commercial aircraft manufacturers have already achieved in Asia, several untapped opportunities remain, particularly in the segment covering large regional jets and small narrowbodies.
This is the message from Brazil’s Embraer; market studies produced by the manufacturer show that 70- to 130-seat jets would be better in 30 percent of the markets currently served by narrowbodies in the region. In fact, more than 250 markets in the Asia Pacific region operate with less than once daily flight frequency, strongly suggesting a need to downsize equipment gauge to improve service levels.
Embraer data also shows that routes longer than 250 nautical miles account for 37 percent of all Asia Pacific regional turboprop capacity. In those cases, more capable, longer-range jets offer operating costs that can match those of turboprops, according to Embraer, suggesting yet another large untapped market for its E-Jets. Finally, Embraer counts more than 600 completely unserved markets appropriate for 70- to 130-seat jets in the Asia Pacific region.
Now present in 11 countries in Asia, Embraer counts more than 200 aircraft flying with more than 20 customers in the region. Jets account for 187 units in seven countries, most notably in China, where Embraer claims a 90-percent market share in the 100-seat category. Throughout the Asia Pacific region, Embraer has collected roughly 70 percent of the market in terms of aircraft delivered, according to its calculations.
Speaking with AIN in the days leading to the Singapore Airshow, Embraer Commercial Aviation CEO Paulo Cesar de Souza e Silva insisted that far more scope for growth lies ahead, particularly in emerging markets such as Indonesia, where Kalstar Aviation just last year took delivery of the country’s first E-Jets–a pair of E195s.
“Indonesia is an excellent market for smaller jets given the geographic situation and the number of people connecting, so there’s a tremendous market opportunity there,” said Silva.
“Of course, the region is immense, so there are many other opportunities. But it is important to say we are taking actions in order to tap that region, especially with the E2 now, which is coming very soon...So we believe that the region is very good for the size of the 195 E2, for instance.”
The Brazilian company finished assembling the first of its new three-member family of jets, the Pratt & Whitney PW1900G-powered E190-E2, at the end of last year and expects to fly the 106-seater by the second half of this year, possibly as early as July. Now operating its so-called iron bird in São Jose dos Campos, Brazil, Embraer plans to use four flight-test airplanes in the program, three of which it expects to fly in 2016 and the fourth–equipped with a full interior–early next year. The company plans to deliver the first E109-E2 in the first half of2018. It has scheduled the E195-E2 entry into service (EIS) a year later and the E175-E2 in2020.
While the E190-E2 serves as the baseline model and retains the E190s current seating capacity, the second model scheduled for EIS–the E195-E2–would carry three more rows of four-abreast passenger seats than the current E195 holds, giving it a maximum high-density capacity of 144 passengers once it enters service in 2019.
“Many of these airlines are flying the narrowbodies inefficiently,” said Silva. “We believe that there is room for these airlines to become more efficient [by] utilizing the right size of aircraft in combination with another narrowbody.”
Silva also predicted a trend toward turboprop replacement in the region, particularly as developing markets grow. Of course, Embraer believes the smallest of the new E2 models, the E175, presents the most appropriate solution for airlines wanting to graduate to turbofan-powered equipment. “[The E175] can have an operating cost that in certain circumstances be very close to the ATR, and in certain circumstances better than the [Bombardier] Q400,” claimed Silva, referring to cases when stage lengths exceed 300 nautical miles and passenger capacity totals 84. “Of course, we haven’t done a deep, deep analysis with oil prices at $20 or $25. So this is something new,” said Silva. “But at a normalized oil price the 175 is very competitive vis-a-vis the Q400.”
Referring to China, Silva acknowledged that the country’s economic troubles have caught Embraer’s attention. “Of course we are following developments very closely,” he said. “Things started this year in a different mood in terms of the economy in general. So, of course, we are following the events very closely to make sure we can adapt. We have to be flexible, but we have also to anticipate events that might come in the near future.”
