Embraer jetmaking CEO eyes higher output after order spree

Brazilian planemaker Embraer EMBJ3.SA aims to restore annual deliveries to pre-pandemic levels of around 100 units within the next two years and then grow further following a recent boom in orders for its regional jets, its top commercial executive said.

The plan calls for an increase of almost 30% in deliveries and underlying production over the next 24 months compared with last year, when Embraer delivered 78 commercial jets, just reaching its forecast of 77 to 85 units.

"The first target is to get back to 100 deliveries, but with the demand we currently have and the sales results...we're going to probably have to go beyond that," Arjan Meijer, CEO of Embraer Commercial Aviation, told Reuters.

Despite losing a politically charged contest in Poland to Airbus AIR.PA, Embraer quadrupled sales of its E2 series last year, outselling the European planemaker's A220 three to one with 131 net orders, including purchases by All Nippon Airways and LATAM.

Despite geopolitical uncertainty, demand is brisk as airlines catch up with fleet replacements set aside during the COVID-19 pandemic, Meijer said.

"Am I concerned about certain global developments? Yes for sure, we keep an eye on it but we don't see the demand falling away," he said in a telephone interview ahead of this week's Airline Economics conference in Dublin.

TREADING SLOWLY ON NEW PLANE DEVELOPMENT

Meijer said supply chains had improved but needed to return to stability in 2026. Engines and aerostructures have been among a shifting set of components affected by disruption.

Still, he said U.S. engine maker Pratt & Whitney RTX.N had largely overcome shortages and maintenance bottlenecks.

That contrasts with a worsening dispute between Airbus and Pratt & Whitney over shortages of the Geared Turbofan engines that are also used to power part of its A320neo family.

Meijer said the variant used on the E2 was less prone to durability problems because the plane is smaller and lighter and entered service later, skirting earlier teething problems.

The number of planes grounded by maintenance delays has fallen to single digits from a peak between 25 and 40, he said, adding he expected this to reach zero by the end of this year.

Meijer declined to comment on media reports that Embraer is set to announce a landmark agreement to assemble planes in India.

A source with knowledge of the matter told Reuters in New Delhi last week that billionaire Gautam Adani's aerospace arm planned to announce a tie-up with the Brazilian planemaker.

The move comes as Brazilian President Luiz Inacio Lula da Silva prepares to visit India next month.

On future developments, Meijer indicated that Embraer was in no hurry to kickstart development of a successor to its family of jets and was focusing for now on the associated technology.

"We are looking at all the options," he said. "A new platform for a (manufacturer) is a major decision and we are going to have to tread slowly and carefully."

-Tim Hepher/Reuters