The presentation provided an overview of the executive aviation market and Embraer's product portfolio and strategy. Key points included:
- The executive aviation market is expected to see strong growth over the next 10 years, driven by economic and demographic factors. Demand is shifting to non-traditional markets.
- Embraer's product portfolio spans light jets to ultra-large aircraft. New models like the Phenom 100 and 300 are expanding into the very light jet segment.
- Embraer is focusing on innovative product and service solutions to become a major player in the business aviation market by 2015. This includes expanding infrastructure and a global customer support network.
Embraer Executive Aviation Overview at 2008 US Annual Analyst & Investor Meeting
1. 8th US Annual Analyst &
Investor Meeting
Executive Aviation Overview
Luís Carlos Affonso
Embraer Executive Vice-President, Executive Aviation
New York - March 19th, 2008
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.
4. Main Demand Drivers
Macro-economic factors Corporate Profits
Stock Market Performance
GDP Individual Wealth
6.5%
2.7% 1.9% 4.8%
2.3% 2.5%
Western Europe 5.0% 4.7%
North America Eastern Europe
8.1%
5.8% Middle East 6.4%
5.5%
5.9%
4.5%
Africa Asia Pacific
Latin America not including Japan
World
2007e 3.7 % 3.3 %
Sources: Global Insight – Jan 2008
2008-17e
5. Demand Shifting towards Non-Traditional Markets
Honeywell Survey – 5 years buying expectations
Europe
North America L.22%
America
9.8%
50%
Latin America
10%
Africa & M.East
4%
Asia 10%
*Source: Honeywell Survey
Dollar depreciation favors aircraft acquisitions by non-US costumers
**Source: AMSTAT, Embraer Analysis
6. Hassle factor: growing delays
Congestion
USA
73% of pax at 35 hubs
80% of delays at main hubs
Europe
22% of flights with delays >15 min in 2006
Terrorism threat
Higher security levels
Poor passenger services
Heathrow airport after the London’s terrorist threat Sources: FAA 2005 and Eurocontrol 2006
7. Bizjet as a tool for better service
Total time
06h44m
Columbus, OH Tulsa,OK
30m
<check-out> Saved
1h29m
Time
Tulsa, OK Houston,TX 43m 4h04m
<transfer> Total time
(60%)
02h40m
10
Houston, TX 3h02m
Columbus,OH 2h20m
<check-in> 1h 10
Commercial Flights
Commercial Premium Offer
Premium Offer Flight (Phenom 100)
Source: Expedia,Feb 2008
Serving a segment willing to pay for greater convenience
8. Used Aircraft Market
Number of aircraft for sale as a % of active fleet
Sources: JETNET, JP Morgan – Feb2008
76% of aircraft for sale are older than 10 years
9. Fractional Industry
Fractional Jet Fleet – Age Distribution
104 104 107
91 93
84 81
66
59
47
32
19 22
12
Age > 12 12 11 10 9 8 7 6 5 4 3 2 1 0
(years)
Sources: JetNet
Fractional fleet renewal is relevant
10. Industry Answer: Business Models Evolution
Source:: Embraer (adapted from Jet Solutions)
Traditional Ownership
Aircraft Management
Fractional Ownership
Cost
Used Fractional
Jet cards memberships
Charter On-Demand
Scheduled Charter
Branded Charter
Air Taxi
“Bizav” Airline
Commercial Aviation
WONDAIR
11. Environmental Issues
Customers and community "green" pressure forcing political and regulatory changes.
EU & USA - two different approaches:
European Union to implement a mandatory Emissions Trade Scheme – unilateral
initiative maybe questioned within Chicago Convention
US focusing on fuel consumption efficiency and ATM improvements
Stakeholder's voluntary initiatives
Netjets Europe: “carbon free shares”
Embraer: 1st to have an ISO 14001 Certificate, investing in new technologies such
as alternative fuels, aerodynamics, advanced structures and systems
Noise regulations: tougher limitations may force earlier aircraft retirement.
Under the pressure of environmental concerns
14. Executive Aviation – Summary
Strong economic drivers despite short-term concerns
Expansion of non-traditional markets
Hassle factor driving customer dissatisfaction
New business models bridging the gap between current alternatives
New product launches
Technological advances enabling very light jets
Environmental concerns and infrastructure investments are barriers to be faced
Positive trend for executive jet demand
15. 2008-2017 Market Forecast – World Deliveries
Product Categories Units US$
2%
7% 8%
Ultra Large
11%
Ultra-long Range 21%
11%
Large
12%
Super Midsize
23%
9%
Midsize
22% 16%
Midlight
12%
Light
26% 7%
Very Light* 9%
4%
* Not including new business models demand: 3,500 to 4,400 VLJs Source: Embraer Analysis
13,150 executive jets US$ 201 billion over the next 10 years
17. Vision
To become a major player in the Business Aviation Market by
2015 through innovative and differentiating product and service
solutions with added value to our customers and shareholders.
18. Embraer Product Portfolio
Lineage 1000®
2008
Ultra-large
Ultra-Long Range
Large
Legacy 600®
Super Mid-Size
Mid-size
Mid-light
Light
Phenom 300®
2009
Very Light Phenom 100 ®
2008
illustrative purposes only
20. Legacy 600® – Interior and Performance
Range* 3,250 nm
MMO Mach 0.80
Max ceiling 41,000 ft
TOFL** 5,551 ft
*8 passengers @ 200 lb, NBAA IFR reserves (200 nm
alternate, 35 min of holding @ 5,000 ft)
** MTOW; ISA; Seal Level
Cabin Volume 1,650 ft3
Cabin Length 49.8 ft
Baggage Volume 240 ft3
The only 3 cabin zones aircraft in its category
23. Phenom 100® - Interior Design
Standard configuration overview
Illustrative purposes only - Preliminary data
24. Phenom 100® – Program Update
Envelope expansion – known performance characteristics
Aerodynamic configuration freeze
Close to 500 flight test hours
3 aircraft flying
Wing static test completed as expected
Trend to achieve 100% contractual commitments
On schedule for 2nd semester first delivery
26. Phenom 300® - Interior Design
INTERIOR DESIGN
Cutaway View Illustrative purposes only - Preliminary data
* Some items are optional.
27. First Phenom 300® – Assembly
Fuselage - wing mating and
engines installation
Mar 2008
On schedule for a mid-year 2008 first flight
28. Phenom Jets – New Production Facilities
Total area of 201,285 square feet (18,700 square meters) at Gavião Peixoto plant
Phenom production hangar inaugurated on 21st Dec. 2007
29. The World also Discovers the Phenom Jets
(February 2008)
Phenom Jets – over 700 firm orders in 44 countries
31. Lineage 1000® – Interior
Designed by Illustrative purposes only
Baggage Compartment
Produced by
Lavatory
Galley
Zone 5
Crew Lavatory
Zone 4
Zone 3
Zone 2
Welcome Area & Zone 1
Crew Lounge
32. Lineage 1000® – Aircraft Production
Interior Completion at PATS, a division of 3rd and 4th a/c assembly
DeCrane Aerospace, in US
2nd a/c - First flight in Feb 2008
Lineage Program is steadily advancing
38. Customer Support Solution
US$ 100+ million investment on
Service Centers Network
Logistics and Parts Support (Phenom Jets Partner: UPS)
Field and Product Support
Training Programs (Phenom Jets: Embraer & CAE Joint Venture)
Executive Care Programs
Preliminary data
39. Service Centers Network
Worldwide Network (middle 2008): 45 Service Centers
Contracted / Planned Authorized Network
Embraer Service Center
Preliminary data
46. This presentation is the property of Embraer - Empresa Brasileira de Aeronáutica S.A. ("Embraer") and shall
not be copied, in whole or in part, or used in any manner, except with Embraer´s prior written consent.
Embraer reserves the right to revise this document whenever occasioned by product improvements,
governmental regulations or other good cause.
All images: figures, finishing materials and colors are for illustration purpose only, and may not represent the
real and final product accurately.
Some features are optional items not included in the baseline aircraft and are subject to price increase and
lead-time analysis.
All data presented shall not be used as guarantee. Guaranteed specifications are listed in the technical
description and represent the only binding guarantee.
In the event of any conflict between this presentation and the technical description, the technical description
shall govern.