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Embraer Day 2012 Melbourne Commercial
1. Commercial
Aviation
Update
Paulo César de Souza e Silva
President Commercial Aviation Oct/2012
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.
3. Contents
Strategic Objectives
E-Jets Family
Market Outlook
Product Development
4. Strategic Objectives
• Leadership in the Commercial Aviation up 120 seats
• Increased results from Services and Support
Products that satisfy market needs (reliable, efficient, flexible, passenger
appeal/preference, performance and economics)
Diversified customer base
Customer base expansion through leasing companies
Excellence in Customer Experience (ECE)
6. E-Jets Deliveries
Mar 2004 4Q12
900
First Delivery
Oct 2005 Nov 2010
Sep 2011
Dec 2006
Sep 2009
Oct 2007 May 2008 Dec 2008
7. Leadership in Commercial Aviation (70-120 seat jets)
Net Orders Market Share Deliveries Market Share
9%
Sukhoi
13%
34%
Comac
1%
43% Bombardier
60%
Boeing
Mitsubishi 4%
Antonov 4%
26% 3%
Airbus
Bombardier 1%
Boeing 1%
Sukhoi 1%
Antonov
E-Jets: since 2004
43% of orders 60% of deliveries
8. 2012 Review
Feb: Azul ordered more 10 E195s
(total of 57 E195s and 5 E190s contracted)
Feb: Estonian Air transition to all-E-Jets fleet
(3 E175s+1 E190, 4 E170s in service leased from Finnair)
Mar: First E190 delivered to Bulgaria Air
(first of 4 E190s)
Mar: BA Cityflyer ordered another E190
(total of 6 E170s and 8 E190s)
Apr: JAL ordered another E170
(total of 11 E170s)
Jun: First
E190 delivered to the Ukrainian
Aviation Group Alliance (total of 5 E190s)
9. 2012 Review
China’s Hebei Airlines ordered more five
Jul:
E190s (total of 7 E190s)
Jul: Conviasa sign a deal for up to 20 E190s
(6 orders + 14 options)
Sep: First E175 delivered to Belavia
(2 E175s leased from Air Lease)
Sep: First E190 delivered to Conviasa
Sep: E190
to debut in Myanmar with
Myanma Airways (2 E190s leased from GECAS)
Oct: TUI Travel PLC to join E-Jets family
(2 E190s leased from BOC Aviation)
11. E-Jets Customer Base (by Business Model)
(% of E-Jets Fleet+Backlog)
2%
19% LCCs
24% 33%
33% Full
Service
43%
74% Regional
48%
24%
E170/E175 E190/E195 E-Jets
E-Jets efficiency in all business models
Source: Embraer (Jun/2012)
12. ECE: Excellence in Customer Experience
Customer Satisfaction
• Airline Support
• Customer Care Center
• Customer Relationship
ECE Projects
• Efficient Maintenance
• Efficient Operation
• Entry Into Service
• Product
Robustness, Support and
Services
• MRO Network
• Parts Availability
• Product Improvements
• Product Quality
• Suppliers Management
• Training
Aircraft Qualified Global Product Low Operating
Availability People Presence Competitiveness Cost
Highest levels of customer experience
with Embraer products and services
14. E-Jets strongly supported by leasing companies
27
21
17 Yangtze River
International Leasing
12
8
4
3
1
2004 2005 2006 2007 2008 2009 2010 2011-2012
Source: Embraer, as of Jun 2012
15. 255 Leased/SLB E-Jets in 35 Airlines
33 Leasing and financial companies supporting E-Jets
16. E-Jets Versatile Applications
Right-sizing of low load-factor
narrow-body flights
Natural growth for existing 50-
seat markets
Direct replacement of old and
inefficient jets
New market opportunities
through lower risk and increased
flexibility
17. E-Jets Deployment
helping airlines to be more efficient
% of Markets
NB Replacement
Right-sizing 7% 14%
45% NB Complement 28%
Natural Growth 31%
20%
New Markets
Direct
Replacement
Source: OAG (1Q12)
18. E175: Delta Shuttle Services
New York (LGA) – Washington (DCA) New York (LGA) – Boston (BOS)
Dec/08 Jun/12 Jun/12 Sep/12
Frequency 15 15 Frequency 15 16
Seats 2,058 1,140 Seats 1,890 1,216
MD88 E175
MD88 E175 E175
MD88 E175 A319 E175
A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
MD88 E175 A319 E175
E175 E175 A319 E175
Mar/2009: Delta shifted LGA-DCA to E175 May/2012: Delta losing $1 million per month on
Delta said that change improved its earnings on LGA-BOS will replace A319 by E175. DL expects an
the route by $13 million annually improvement of $20 million per year on the route
Source: OAG (1st week – Jun/2012) and Aviation Daily (May/2012)
19. E170/175 Helping DL to win in NY (LGA)
Delta Planned Expansion in LGA
E170/175 Only E170/175 & Others Others
E170/E175:
the right product attributes for business passengers
~30% (top A/C) of all DL´s markets out of LGA
Source: BofA Merrill Lynch Conf. May/2012, OAG 2H2012
20. E-Jets on Prime Shuttle Markets
Calgary - Vancouver
E190 12x Daily
NY (LGA) - Boston
Calgary 15x Daily
E190
Vancouver
Ottawa NY (LGA) - Toronto
Toronto
Chicago Boston 9x Daily
E190/E175
Philadelphia NY
Washington
Philadelphia - Boston
E190/E175 17x Daily
Ottawa - Toronto
E190/E175 8x Daily
NY (LGA) – Wash. (DCA)
E175 15x Daily
NY (LGA) – Chicago
E175 13x Daily
Source: OAG (1st. week – Jun/2012)
21. Market Opportunities: US Scope Relaxation
US Regional Jet Capacity Share (ASM by Segment)
AA: changes expected
AA relaxation United
in the short term
potential CO scope relief
(Chapter 11)
100+ units J61-90
100+ units J61-90
J30-60 J61-90
29%
54%
61% 60%
100% 100% 100% 100% 100% 100%
71%
46%
39% 40%
2000 2011 2000 2011 2000 2011 2000 2011 2000 2011
Trend towards J75 ~70% of regional capacity
Source: OAG
22. Market Opportunities for 61-90 Seat Jets
2011 RJ50 US Domestic Operation (1.9 Million Flights)
Natural Growth
Opportunities
% of Flights
52%
40%
8%
20-29 30-39 40-49
Pax per Departure
40% of RJ50 flights with loads appropriated to 61-90 seat jets
Source: OAG / US DOT T100
23. Market Opportunities for 91-120 Seat Jets
2011 Narrowbody (NB) US Domestic Operation (3.4 Million Flights)
Right-Sizing
Opportunities (*)
% of Flights
Pax per Departure
34% of all NBs flights with loads appropriated to 91-120 seat jets
(*) Scope clauses restricting Regional Airlines operation, but some
Source: OAG / US DOT T100 Mainline carriers are negotiating salary rates for 110-seater
24. Replacement Opportunities - World
(Jets 61-120 seats)
350
300
B737-500
Number of Aircraft
250
200 B717-200 F100
B737-200
150
100 Bae 146
YAK-42 DC-9
50
737-600 F70 F28 TU-134
0
5 15 25 35 45
Average Age (years)
More than 900 aircraft older than 15 years
Source: OAG (Jun/2012 ; Passenger, Active in Service, Scheduled Services)
25. Projected Deliveries by Segment
32,800 new aircraft deliveries total market value of US$ 3.6 tri*
6,795 aircraft 17305
(21%)
6185
3765
2515 2625
405
TPs Jet 30-60 Jet 61-90 Jet 91-120 NB (121-210) WB (201+)
Market Outlook 2012-2031
* At list price
26. 6,795 jet deliveries by world region
(30-120 seats)
2,195 North America 32%
1,460 Europe 21%
1,005 China 15%
670 Latin America 11%
505 Asia Pacific 7%
445 Russia/CIS 7%
305 Middle East 4%
210 Africa 3%
Market Outlook 2012-2031