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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
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.
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.
The Legacy World




THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
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.
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.
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.
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.
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.
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.
2004 Recent Achievements




THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Airline Market
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
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.
Competitive
Environment
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.
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.
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.
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.
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.
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.
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.
Embraer

Market

Forecast
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.
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.
EMBRAER 170

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

  • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.
  • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.
  • 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. 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. 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. 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. 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. 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. 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.
  • 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. 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.
  • 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. THE INFORMATION CONTAINED HEREIN IS THE PROPERTY OF EMBRAER AND SHALL NOT BE COPIED OR USED WITHOUT EMBRAER’S WRITTEN CONSENT.