Embraer’s E190-E2 “Shark” lands at one of the world’s highest airports.
Embraer made a bold prediction at the 12th China International Aviation & Aerospace Exhibition. The company is forecasting that the Chinese passenger jet market will take delivery of almost 1,400 executive-sized jets, with up to 150 seats, over the next two decades—with a potential value of $82 billion. Embraer considers itself the leading manufacturer of commercial jets up to 150 seats, which would make the company ideally placed to capitalize on that demand.
Company officials cite steady economic growth, investment in airport construction, the implementation of basic air service plans, and a growing middle class with a demand for travel as positive factors that are boosting Embraer’s confidence in the market.
But while China has instituted policies that promote air traffic growth in recent decades, analysts are concerned that the country’s regional jet market continues to struggle. A 2016 policy by the Civil Aviation Administration of China (CAAC) required passenger carriers to operate at least 25 small passenger jets before they could start using larger jets. This policy was implemented to promote flights into China’s smaller cities—Chinese carriers tend to favor the big passenger jets. However, the CAAC has only approved two airlines under the policy—and there is a backlog of applicants.
Some in the industry think this delay is meant to give domestic Chinese planemakers an advantage over external companies like Embraer and its main competitor, Bombardier.
Embraer’s Profit Hunter E190-E2 made its Chinese market debut at the airshow in Zhuhai, showing off its distinctive shark paint scheme as it embarked on a tour of the country. Fuzhou Airlines, the E190-E2’s launch customer in China, will receive its first jet at the end of 2018.
“China is the world’s second largest market for E-Jets. We have delivered 153 commercial aircraft in the region, which means E-Jets E2 have a huge incumbent base to build upon,” said John Slattery, Embraer’s President and CEO. “We are eager to present this game-changer aircraft to our Chinese operators.”
Regulatory concerns haven’t stopped Embraer’s ambitions for the Chinese small jet market. China is expected to surpass the U.S. as the world’s largest air travel market by 2022 and Embraer believes it is positioned to be a dominant player in that arena.
Read more about how Embraer is doing against its competitors at Aerospace Sector Companies Record Strong Q3 Results.