5th Annual Analyst & Investor Meeting
          November 19th, 2004
     São Jose dos Campos SP, Brazil




    Civil Airc...
Forward Looking Statement



 This presentation includes forward-looking statements or statements about events or
 circums...
Contents

    • Corporate Aircraft Market Update
       • Industry overview
       • Market Forecast

    • Airline Market...
The Legacy World




THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT E...
The world has discovered the Legacy




          40 aircraft, 11 countries, the right choice
                  THE INFORM...
Customer Support - Service Center Network

                                Aircraft Maintenance Services


               ...
Customer Support - Parts Distribution Centers

Fort Lauderdale                                                    Paris
• ...
Reliability



                                                                                                         99...
A Differentiated Value for Customers
                                                                               Price ...
Program Landmarks
                2000       2001                            2002                             2003        ...
2004 Recent Achievements




THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED W...
Special Runway Operation: LCY
                                                                        First large cabin tw...
Maintenance Plan optimazation



                                                       Further task optimization

       ...
Embraer’s Commitment to
                                                       the Corporate Aircraft
                    ...
Ceiling

          41,000 ft
                                                         More flexibility

                  ...
Connectivity


     HSD   - High Speed Data


                                                          In-touch, round th...
Interior Ambiance

    LED lighting / Window shade

                                                                 Great...
Interior Completion Capability



                                                                In-house capability

   ...
Embraer

                                        Corporate Aircraft Market

                                        Foreca...
Embraer Market Forecast
                                          Embraer Forecast (2005-2014):
                          ...
Airline Market
Shifting Capacity Among Business Models

                     US Domestic ASM Evolution (Index 100)
                     M...
US Airline Industry Evolution

       Share of US Domestic RPM
      100%              3%           5%                    ...
European Airline Industry Evolution

          Share of Intra-European RPKs
       100%
                                 1...
Traffic Recovering Slowly

       US Domestic RPM (Billion)
1.600

1.400

1.200

1.000

   800

   600



                ...
US Regionals

                         ASM - (Billion)                                                                    ...
US LCC’s

                     ASM - (Billion)                                                                        Load...
US Majors

              ASM - (Billion)                                     80%                                  Load Fac...
US Domestic Yield Evolution

                   16

                   15
Yield (US¢/RPM)




                   14

     ...
Responding to Market Needs

                                                                                              ...
Opportunities for TurboProp Substitution

 There are currently 5244 TPs in Active Service Worldwide

         Scheduled Fl...
Opportunities for New Route Development
ERJ 135: Steep Approach Capable (London City Airport)
Still Air Range: 600 nm

   ...
ERJ 145 Family Worldwide Fleet SR and CR

          Schedule Reliability & Completion Rate
                     12 Months ...
ERJ 145 Family Orderbook




                                          Firm                 Options                       ...
The E- Jets Family


                                                                       70 – 78 Seats



             ...
Opportunity for Right Size – Aircraft Capacity

      25
                                                                 ...
The Opportunity for Right Size - Range

                     Total Market Served by 91-180 Seats Aircraft (US Airlines)


...
EMBRAER 170 / 190 Family Orderbook




                                                                                   ...
Competitive
Environment
Embraer Commercial Jets Unique Position

                  30Y             50Y                 70Y                 90Y    ...
30-60 Seat Jet Competitors




                                                                               ERJ 135
    ...
Evolução do Market Share (30-60 pax)

100%
            93%
                                                               ...
61-90 Seat Segment Competitors




 RRJ
 RRJ
         ?
                                        EMBRAER 170
              ...
Evolução do Market Share (61-90 pax)
  100%

    90%                                       87%

    80%
                  ...
91-120 Seat Segment Competitors

B717
B717



        B737-600
        B737-600




                                      ...
Evolução do Market Share (91-120 pax)
    100%                                  100%




      80%
                       ...
Embraer

Market

Forecast
Embraer Market Forecast 2005-2024

     Worldwide Jet Deliveries by Capacity Segment
                   2005 – 2014       ...
Market Forecast               2005-2024
30 - 120 Seats: 7,800 Jets



                                                    ...
EMBRAER 170

Entry Into Service
EMBRAER 170 EIS Statistics
  Operating Summary – from March 5th to October 24th


                          Operators     ...
EMBRAER 170 EIS Statistics
Last 6 Months Schedule Reliability and Completion Rate

  100
                                 ...
EMBRAER 170 Operations at US Airways




Source: BackOAG Oct2004                                                          ...
Rightsizing


                                            Total flights per quarter

            Route                    ...
Turboprop Replacement and Market Growth




                     Route                 PIT-SYR                           (...
EMBRAER 170 Operations at Alitalia




                                                                                   ...
Rightsizing
                                                                                                              ...
Rightsizing and Market Development
                                                                         Days of       ...
Mixed Operation

 Additional daily frequency on business routes
                                                          ...
EMBRAER 170 Operations at LOT




                                                                                        ...
New Routes Implementation

                                                                     Days of                   ...
THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONS...
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2004* 5o.Encontro Anual De Investidores Da Embraer Mercado Civil (DisponíVel Apenas Em InglêS)

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2004* 5o.Encontro Anual De Investidores Da Embraer Mercado Civil (DisponíVel Apenas Em InglêS)

  1. 1. 5th Annual Analyst & Investor Meeting November 19th, 2004 São Jose dos Campos SP, Brazil Civil Aircraft Market Outlook and Trends Frederico Fleury Curado Executive Vice President Civil Aircraft
  2. 2. Forward Looking Statement This presentation includes forward-looking statements or statements about events or circumstances which have not occurred. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends affecting our business and our future financial performance. These forward-looking statements are subject to risks, uncertainties and assumptions, including, among other things: general economic, political and business conditions, both in Brazil and in our market. The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,” “expects” and similar words are intended to identify forward-looking statements. We undertake no obligations to update publicly or revise any forward-looking statements because of new information, future events or other factors. In light of these risks and uncertainties, the forward-looking events and circumstances discussed in this presentation might not occur. Our actual results could differ substantially from those anticipated in our forward-looking statements. THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  3. 3. Contents • Corporate Aircraft Market Update • Industry overview • Market Forecast • Airline Market Update • Industry overview • Embraer positioning • Competitive environment • Market Forecast • EMBRAER 170 Entry Into Service THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  4. 4. The Legacy World THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  5. 5. The world has discovered the Legacy 40 aircraft, 11 countries, the right choice THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  6. 6. Customer Support - Service Center Network Aircraft Maintenance Services 16 Authorized Service Centers offering airframe line and heavy maintenance Wherever operators need THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  7. 7. Customer Support - Parts Distribution Centers Fort Lauderdale Paris • 26,2 K Part Numbers • 24.7 K Part Numbers Beijing • Service Hours=24/7 • Service Hours=24/7 • 3.1 K Part Numbers • 5.0 K Line items/month • 2.4 K Line items/month • Service Hours=12/6 • Inventory value = $ 103.9 M • Inventory value = $ 123.8 M • 1.6 K Line items/month • Inventory value = $ 15.9 M S José dos Campos • 22.1 K Part Numbers • Service Hours=12/6 • 6.1 K Line items/month • Inventory value = $ 62.9 M 4 Distribution Centers distribute parts to Service Centers Supporting our clients around the world THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  8. 8. Reliability 99% dispatch reliability Over 120 hours per month in fractional operations Exceptional passenger acceptance Image building up in the market Changing the expectations for a Business Jet THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  9. 9. A Differentiated Value for Customers Price vs. Productivity Index 360 Productivity Index [(Speed x Cabin Volume x Range)/TOFL] x Legacy 340 320 300 R TE 1,000 280 T BE Challenger 300 260 Falcon 2000 240 220 G200 Horizon 200 35.000 30.000 25.000 20.000 15.000 Price US$ x 1,000 Higher Productivity @ Lower cost leading to Greater value THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  10. 10. Program Landmarks 2000 2001 2002 2003 2004 New Interior Enhancements Maintenance Range Plan (weight reduction) (aerodynamics improvement) Certification CTA FAA JAA CIS Maiden Flight Announcement Promises made ... results delivered THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  11. 11. 2004 Recent Achievements THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  12. 12. Special Runway Operation: LCY First large cabin twin jet capable to operate in LCY Steep approach capability fuly operational Wet and dry operations First principles software Increased range capability: London - Moscow London - Cairo 8 pax London – Azores 4 pax Mach 0.74 The Legacy is ready for the most demanding and stringent missions THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  13. 13. Maintenance Plan optimazation Further task optimization Calendar limitation escalation 4 stops per year ( 2 at service centers ) Extended flexibility Reduced maintenance costs Available on 1Q 2005 Lower Maintenance = Higher Availability THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  14. 14. Embraer’s Commitment to the Corporate Aircraft Market What´s Planned for 2005? THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  15. 15. Ceiling 41,000 ft More flexibility Freedom: avoid congested flight levels Less turbulence Less traffic Available as of March 2005 (also as a SB for current operators) Improved mission capability THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  16. 16. Connectivity HSD - High Speed Data In-touch, round the clock, around the globe En route productivity enhancement In-flight office – taking care of business Available as of 2Q 2005 Connected at the speed of business THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  17. 17. Interior Ambiance LED lighting / Window shade Greater comfort Personalized ambience feature Ease of maintenance Enhanced illumination Available as of 2Q 2005 Enriching Personal Comfort and Flying Experience THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  18. 18. Interior Completion Capability In-house capability Higher level of customization Cost and time savings Production to start in 2005 Commitment to product excellence and differentiation THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  19. 19. Embraer Corporate Aircraft Market Forecast (2005 – 2014) THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  20. 20. Embraer Market Forecast Embraer Forecast (2005-2014): (2005 -2014): 7,560 aircraft - US$ 130 billion ,560 Deliveries Revenues Category (aircraft) (US$ bi) Super Midsize 1,485 30.0 Large 945 28.5 Other 5,130 71.3 Ultra Long range Light Mid light Large 22% Entry 11% 14% 13% 22% Global Very Light Mid Size 6% 6% 13% Very Light Entry 1% Global 4% 2% Super Mid Size Ultra Long Large Super midsize Mid light Light 13% 18% midsize 10% 4% range 8% 18% 9% Deliveries (cumulative) Revenues (cumulative) 2,430 aircraft in target segment THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  21. 21. Airline Market
  22. 22. Shifting Capacity Among Business Models US Domestic ASM Evolution (Index 100) Majors Low Cost Regional 200 180 160 140 120 100 80 60 0 3 0 1 2 3 0 /00 1 2 1 2 3 /04 /03 /01 /02 l/0 l/0 t/0 t/0 l/0 l/0 t/0 t/0 r/0 r/0 r/0 r/0 jan jan jan jan jan ju ju ju ju ou ou ou ou ab ab ab ab Source: EMBRAER THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  23. 23. US Airline Industry Evolution Share of US Domestic RPM 100% 3% 5% 8% 12% 19% 17% 80% 22% 29% 60% 40% 85% 78% 69% 52% 20% 0% ... 1995 2000 2003 2014F Majors Low Costs Regionals Source: WATS, Embraer THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  24. 24. European Airline Industry Evolution Share of Intra-European RPKs 100% 14% 16% 19% 21% 1% 80% 6% 13% 60% 31% 40% 85% 77% 68% 20% 0% ... 48% 1995 2000 2003 2014F Majors Low Costs Regionals Source: AEA, ERA, ATI, Embraer THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  25. 25. Traffic Recovering Slowly US Domestic RPM (Billion) 1.600 1.400 1.200 1.000 800 600 ... 400 200 0 2000 2001 2002 2003 2004E 2005F 2014F Majors Low Costs Regionals Source: WATS, Embraer THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  26. 26. US Regionals ASM - (Billion) Load Factor 60 75% 50 70% 40 65% 30 60% 20 55% 10 0 50% 2001 2002 2003 2001 2002 2003 Source: EMBRAER THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  27. 27. US LCC’s ASM - (Billion) Load Factor 200 80% 75% 160 70% 120 65% 80 60% 40 55% 0 50% 2001 2002 2003 2001 2002 2003 Source: EMBRAER THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  28. 28. US Majors ASM - (Billion) 80% Load Factor 520 75% 500 480 70% 460 65% 440 60% 420 55% 400 50% 2001 2002 2003 2001 2002 2003 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  29. 29. US Domestic Yield Evolution 16 15 Yield (US¢/RPM) 14 13 12 11 10 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1998 1999 2000 2001 2002 2003 2004 Source: THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  30. 30. Responding to Market Needs 37 Seats 44 Seats 50 Seats 50 Seats (2,000 nm range) THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  31. 31. Opportunities for TurboProp Substitution There are currently 5244 TPs in Active Service Worldwide Scheduled Flights Non-Scheduled Flights (3160 TPs) (2084 TPs) TP70 TP<20 TP70 TP<20 TP50 382 130 16 267 4% TP35 142 12% 1% 13% 75 7% 4% TP20 TP50 1045 723 33% 23% TP35 TP20 880 1544 28% 75% THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  32. 32. Opportunities for New Route Development ERJ 135: Steep Approach Capable (London City Airport) Still Air Range: 600 nm ERJ 135 - Typical European airline OEW - Full PAX Passengers at 90.7 kg (200 lb) - Cruise at LRC - Airport Temp. at 20.5ºC / ISA+5.5ºC (85% Summer) - 85% Summer Winds - JAR OPS Reserves 100 nm alternate THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  33. 33. ERJ 145 Family Worldwide Fleet SR and CR Schedule Reliability & Completion Rate 12 Months Moving Average REF. CR=99.73% (completion) SEP/2004 SR=98.95% (15 min. delay) THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  34. 34. ERJ 145 Family Orderbook Firm Options Deliveries Firm (as of 3 rd quarter, 2004) Total Backlog ERJ 135 124 3 127 105 19 ERJ 140 94 20 114 74 20 ERJ 145 704 408 1,112 595 109 Total 922 431 1,353 774 148 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  35. 35. The E- Jets Family 70 – 78 Seats 78 – 86 Seats 98 - 106 Seats 108 – 118 Seats Engineering Ergonomics Economics Efficiency THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  36. 36. Opportunity for Right Size – Aircraft Capacity 25 2000 20 2001 2002 15 2003 % 10 5 0 50 60 70 80 90 100 110 120 130 140 >150 Source: Back (US DOT T100) THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  37. 37. The Opportunity for Right Size - Range Total Market Served by 91-180 Seats Aircraft (US Airlines) 1.000.000 800.000 2003 Number of Flights 600.000 400.000 1995 200.000 0 100 300 500 700 900 1100 1300 1500 1700 1900 2250 2750 >3000 Distance Sector (nm) Source: Back - OAG THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  38. 38. EMBRAER 170 / 190 Family Orderbook Firm Firm Options Total Deliveries (as of 3 rd quarter, 2004) Backlog EMBRAER 170 155 148 303 36 119 EMBRAER 190 155 215 370 - 155 EMBRAER 195 15 20 35 - 15 Total 325 383 708 36 289 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  39. 39. Competitive Environment
  40. 40. Embraer Commercial Jets Unique Position 30Y 50Y 70Y 90Y 110Y 130Y Potential New Entrants Scope THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  41. 41. 30-60 Seat Jet Competitors ERJ 135 ERJ 135 CRJ200 // 440 CRJ200 440 ERJ 140 ERJ 140 328JET 328JET ? ERJ 145 and 145XR ERJ 145 and 145XR THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  42. 42. Evolução do Market Share (30-60 pax) 100% 93% Possible 83% 80% ACA cancelation of 34 CRJ200 67% 60% 54% 50% 52% 51% 50% 51% 49% 50% 43% 45% 40% 32% 42% 46% 45% 45% 44% 45% 17% 20% 7% 5% 6% 4% 5% 4% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: EMBRAER BOMBARDIER AVCRAFT Embraer THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  43. 43. 61-90 Seat Segment Competitors RRJ RRJ ? EMBRAER 170 EMBRAER 170 CRJ700 CRJ700 CRJ900 CRJ900 ARJ21 ARJ21 ? EMBRAER 175 EMBRAER 175 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  44. 44. Evolução do Market Share (61-90 pax) 100% 90% 87% 80% 72% 70% 67% 64% 60% 53% 52% 49% 50% 40% 36% 32% 30% 33% 30% 27% 28% 14% 21% 20% 16% 19% 10% 0% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Embraer EMBRAER BOMBARDIER FAIRCHILD DORNIER THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  45. 45. 91-120 Seat Segment Competitors B717 B717 B737-600 B737-600 EMBRAER 190 EMBRAER 190 A318 A318 ARJ21 ARJ21 ? RRJ RRJ ? EMBRAER 195 EMBRAER 195 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  46. 46. Evolução do Market Share (91-120 pax) 100% 100% 80% 67% 73% 66% 61% 59% 60% 55% 40% 32% 31% 26% 26% 25% 20% 20% 16% 14% 7% 7% 6% 7% 0% 0% 0% 0% 0% 95 96 97 98 99 00 01 02 03 04 19 19 19 19 19 20 20 20 20 20 Source: 2nd As of EMBRAER BOEING AIRBUS Embraer 2004 Quarter THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  47. 47. Embraer Market Forecast
  48. 48. Embraer Market Forecast 2005-2024 Worldwide Jet Deliveries by Capacity Segment 2005 – 2014 2015 – 2024 2005 – 2024 Segment 2004- 2004-2013 2014- 2014-2023 2004- 2004-2023 650 1,300 1,950 30 - 60 1,150 1,450 2,600 1,300 1,550 2,850 61 – 90 1,300 1,600 2,900 1,250 1,750 3,000 91 – 120 1,250 1,700 2,950 3,200 4,600 7,800 TOTAL 3,700 4,750 8,450 30 to 120-seat segment value = US$ 170 billion 30 to 120 -seat segment value = US$ 180 billion 120- THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  49. 49. Market Forecast 2005-2024 30 - 120 Seats: 7,800 Jets CIS CIS USA, Canada USA, Canada Europe Europe & Caribbean & Caribbean 495 495 1,319 1,319 6% China China 4,165 4,165 17% 635 635 53% Middle East Middle East 8% & Africa & Africa 177 177 Latin Latin 3% Asia Asia America America Pacific Pacific 538 538 471 471 7% 6% THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  50. 50. EMBRAER 170 Entry Into Service
  51. 51. EMBRAER 170 EIS Statistics Operating Summary – from March 5th to October 24th Operators 4 Aircraft in Service 37 Flight hours 29,165 Flight Cycles 21,567 USAirways LOT Alitalia United PR13/Oct/04 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  52. 52. EMBRAER 170 EIS Statistics Last 6 Months Schedule Reliability and Completion Rate 100 CR = 99.5 99 98 SR = 97.7 97 96 95 94 93 92 Schedule Reliability 91 Completion Rate 90 M J J A S O THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  53. 53. EMBRAER 170 Operations at US Airways Source: BackOAG Oct2004 Oct 2004 – 100 Routes THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  54. 54. Rightsizing Total flights per quarter Route MCI-PHL PHL-IAH BNA-PIT Equipment 733 319 E70 733 319 E70 733 E70 2nd Qtr 2003 203 42 0 134 121 0 161 0 2nd Qtr 2004 60 0 153 96 78 97 3 88 3rd Qtr 2004 0 0 198 0 0 342 0 127 Lower cost per trip . . . Source : Back – OAG Data, Sep2004 Better economics ! THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  55. 55. Turboprop Replacement and Market Growth Route PIT-SYR (240 nm) BUF-PIT (164 nm) Equipment DH8 SF3 E70 DH8 SF3 E70 2nd Qtr 2003 161 0 0 28 40 0 2nd Qtr 2004 26 61 177 0 169 60 3rd Qtr20 04 0 0 197 0 0 130 Higher service standards . . . Better competitiveness and higher market share ! Source : Back – OAG Data, Sep2004 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  56. 56. EMBRAER 170 Operations at Alitalia Oct 2004 – 40 Routes Source: BackOAG Oct2004 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  57. 57. Rightsizing Seat Total Operator Orig Dest Eqp Operation Departure Seats Capacity LIN FRA June MD80 xSaSu 07:45 155 2003 A319 daily 15:55 124 A319 xSa 20:05 124 18 weekly 2387 LIN FRA Jan A319 xSaSu 07:50 124 2004 A319 daily 15:55 124 A319 xSa 20:15 124 18 weekly 2232 LIN FRA June E170 xSaSu 07:40 72 2004 E170 daily 16:00 72 E170 xSa 20:10 72 18 weekly 1296 Same service level, fewer seats . . . Lower cost, better economics ! Source : Back – OAG, June 2004 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  58. 58. Rightsizing and Market Development Days of Seat Total Operator Orig Dest Eqp Departure Operation Capacity Seats FCO VIE Jul 2003 A319 daily 14:25 124 7 weekly 868 FCO VIE Jul 2004 E170 daily 09:00 70 E170 daily 16:35 70 14 weekly 980 Enhanced frequency level . . . More revenue, better economics ! Source : Back – OAG, June 2004 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  59. 59. Mixed Operation Additional daily frequency on business routes Days of Seat Total Operator Orig Dest Eqp Departure Operation Capacity Seats LIN BCN June MD80 xSa 16:00 155 2003 6 weekly 930 June MD80 xSu 06:45 155 LIN BCN 2004 E170 xSa 16:55 72 12 weekly 1362 Improved service levels . . . More revenue , better economics ! Source : Back – OAG, June 2004 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  60. 60. EMBRAER 170 Operations at LOT Oct 2004 – 81 Routes Source: BackOAG Oct2004 THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  61. 61. New Routes Implementation Days of Seat Total Operator Orig Dest Eqp Departure Operation Capacity Seats WAW DUB Nov E170 xTuSa 20:20 70 350 2004 Source : LOT THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
  62. 62. THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
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