IT’S difficult to overstate just how much the Covid-19 pandemic has devastated airlines. In 2020, industry revenues totalled $328 billion, around 40 percent of the previous year’s. In nominal terms, that’s the same as in 2000. The sector is expected to be smaller for years to come and traffic is unlikely to return to 2019 levels before 2024.
Unlike the 2008 global financial crisis, which was purely economic and weakened spending power, Covid-19 has changed consumer behaviour — and the airline sector — irrevocably. But, Embraer President and CEO Arjan Meijer is confident of a rebound. “The last two years was a testing time for all of us especially the industry but I am seeing things falling back in place slowly and it will get back to where it was before very soon,” Meijer says in an exclusive interview with Business Plus.
In 2021, the revenue of the Brazilian aerospace manufacturer Embraer S.A. amounted to almost $4.2 billion, an increase of 11.3 percent compared to the revenue stream reported a year earlier.
“As you know we make aircrafts that is fuel efficient and cost effective, airlines these days prefer smaller planes to transport passengers and that saves a lot of cost for them,” Meijer points out.
Since it was founded in 1969, Embraer has delivered more than 8,000 aircraft. On average, about every 10 seconds an aircraft manufactured by Embraer takes off somewhere in the world, transporting over 145 million passengers a year.
Meijer believes that a return of customer confidence is key, and assuming that comes back “then airlines will rebuild their networks and will re-engage in fleet discussions.”
Embraer’s E2 series jets are highly popular in the region that attracted Oman’s budget airline SalamAir to sign an MoU. SalamAir is planning to purchase a dozen of E195-E2 jets in the coming years that will help the airline to strengthen its domestic network. “SalamAir has had an exceptional five years since its launch and their plans to purchase Embraer will help them to strengthen their future plans,” Meijer notes.
“We have studied and reviewed before we decided to go with Embraer,” says Capt. Mohamed Ahmed, CEO of SalamAir. “We can save 20% on fuel, and at the same time it will help us to fly to most of our domestic and regional routes with lower seat aircrafts,” he adds.
Embraer’s strategy, Meijer says, is to bring to market a turboprop that delivers the step-change in sustainability and operating economics.
“In commercial aviation we are confident that going forward airlines will look at our segment,” he says. In the “new world after Covid”, Embraer “can offer a very compelling product to help them get out of the crisis,” he adds.
A recent 10-year forecast done by his team suggests a requirement for 5,500 aircraft in the sub-150-seat segment by 2029.
