Spreading the Love, Old and New

Spreading the Love, Old and New

Hi everyone,

We just reached another milestone with E-Jets program. This month, we will deliver our 1,300th aircraft, an E195. We’re handing it over to Tianjin Airlines of China. It’s a remarkable achievement and one that makes us thankful of the many customers who helped us get to 1,300. Yet, as much as we like new aircraft sales, we’re finding strong demand for our pre-owned (or as I call them, pre-loved) ERJs and first-generation E-Jets.

The drop in the price of crude oil has helped strengthen airline balance sheets. Many carriers are choosing to keep their older aircraft longer since they’re profitable to operate with cheaper jet fuel. It also means that good used airplanes, those with robust structural integrity and decent economics, are in high demand. I’ve been particularly pleased with the E190’s record in the pre-owned market – on average, we’re seeing one E190 transaction per week.

The first E190s have just passed the ten-year mark and can fly for at least another 15 years. The market knows this. It’s why about 85% of jets of similar size that are taken out of service are back flying within a year. The appeal of the E190, in particular, shows in its residual value. Its RV consistently outranks other aircraft in its category and is holding steady.

Always the optimist, I’m encouraged about the prospects for all pre-owned E-Jets, not just the E190. In my last message, I reported that China’s CAAC is expediting licenses for new airlines applying to operate regional jets. Russia, too, is opening its doors to more of our airplanes. Its Federal Air Transport Agency recently granted type certification to the E170 and E175.

It’s welcome news that will allow us to market the complete family of E-Jets. Three years ago, Saratov Airlines acquired used E195s from a European operator to become the first Russian airline to fly an E-Jet. And now with some 400 of the country’s 70 to 130-seat airplanes nearing the end of their structural lives, I believe there are tremendous opportunities for Embraer as carriers begin to update their fleets. I’m hoping to announce new operators in Russia as a result of these developments.

Switching continents, Africa is also a prime region for adding pre-owned aircraft. Embraer turboprops first appeared in Africa 40 years ago. The continent is now home to 90 of our jets including some 50 second-hand ERJs that have been busy building route networks. In regions like Africa where low ownership cost is essential, I’m optimistic that today’s ERJ operators will be tomorrow’s customers for pre-owned E-Jets.

As I can attest with our first-generation E-Jets that are just starting to mature, efficient, economical airplanes never go out of style, whether they’re new, pre-loved or re-loved.

John Slattery

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