Embraer has released its first-quarter orders and deliveries results for 2020. Through March 31st, the Brazilian manufacturer delivered only 14 aircraft. Five of these were commercial jets, while the other nine were business jets. Although Embraer usually delivers fewer jets in the first quarter than any other, it highlighted the abandoned Boeing deal as one reason for the low number of deliveries.
Embraer's first-quarter deliveries
The Brazilian manufacturer recorded five commercial jet deliveries. This included three E175s, one E190-E2, and one E195-E2. The other nine jets that were delivered were business jets. Five were Phenom 300s, one was a Praetor 500, and three were Praetor 600s. In total, this gave them a delivery tally of 14 aircraft.
What is interesting, however, is how Embraer spun the results:
"Historically, Embraer seasonally has fewer deliveries during the first quarter of the year, and in 2020 in particular, the commercial aircraft deliveries in the first quarter were also negatively impacted by the conclusion of the separation of Embraer's Commercial Aviation unit in January."
For integration into Boeing, the commercial aviation unit was separated from the larger entity. This move would let Embraer maintain its private jet arm as well as defense jet arms. Commercially, Embraer has not always had the best results, and Boeing was supposed to help break the E2 jets into a larger market. And, perhaps, even design a brand new kind of jet.
Embraer put a lot of time and energy into this deal. And, rightly so. The Brazilian planemaker's E2 jets have undersold the competition and even its previous generation. Embraer has not embarked on any other ambitious jet projects.
However, Boeing went ahead and terminated the cooperation agreement with Embraer citing some deficiencies on Embraer's end. Meanwhile, Embraer claimed Boeing wrongfully terminated the transaction and is seeking damages.
Embraer's backlog
As of March 31st, the manufacturer had a firm order backlog worth $15.9 billion. The backlog includes 163 E175s, four E190s, 15 E190-E2s, and 136 E195-E2s for a total of 318 jets. Another 401 are available as options split across 293 E175s, 61 E190-E2s, and 47 E195-E2s. Aircraft order options are when a manufacturer and an airline agree to the right to purchase additional aircraft in the future for a previously agreed-upon price and date. Airlines do sometimes convert these options into firm orders if they need additional planes.
Here is the breakdown of the backlog by customer:
- American Airlines: 11 E175s
- Congo Airways: 2 E175s
- Horizon Air/Alaska Airlines: 3 E175s
- NAC/ALDUS (lessor): 1 E175 and 1 E190
- Republic Airlines (regional US airline): 100 E175s
- Skywest (regional US airline): 26 E175s
- United Airlines: 20 E175s
- CIAF (lessor): 3 E190s
- Air Kiribati: 1 E190-E2
- Aircastle (lessor): 5 E190-E2s and 20 E195-E2s
- Helvetic Airways: 9 E190-E2s
- Aercap (lessor): 40 E195-E2s
- Air Peace: 13 E190s
- Azul: 51 E195-E2s
- Binter Canarias: 2 E195-E2s
- ICBC (lessor): 10 E195-E2s
Overall
Embraer's first-quarter deliveries were not stellar commercially. In 2019, the manufacturer delivered 11 commercial jets and 11 executive jets, 22 in total, during the first quarter. Back in 2018, Embraer delivered 14 commercial jets and 11 private jets in the first quarter– 25 in total. And, in 2017's first quarter, the numbers were 18 commercial and 15 private.
This downward trend in deliveries shows why losing out on an agreement with Boeing is such a big deal for the manufacturer. Its aircraft are not selling, and its deliveries are on a downward trend. Coupled with the fact that the industry is facing its worst crisis in years and Embraer has a serious problem on their hands.
What do you make of Embraer's first-quarter deliveries? Do you think Boeing is to blame? Let us know in the comments!