Embraer Day 2012 Melbourne Commercial
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Transcript of Embraer Day 2012 Melbourne Commercial
Paulo César de Souza e Silva
President Commercial Aviation Oct/2012
Paulo César de Souza e Silva
President Commercial Aviation Oct/2012
Commercial Aviation Update
Commercial Aviation Update
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.
Forward Looking Statement
Contents
Strategic Objectives
E-Jets Family
Market Outlook
Product Development
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)
Market LeadershipCommercial Aviation up to 120 seats
Ago/2012: 1,060+ E-Jets ordered
Jun/2012Order
sDeliveri
es
E195 134 99
E190 546 424
E175 189 153
E170 189 182
E-Jets Deliveries
Nov 2010Nov 2010
Sep 2009Sep 2009
Dec 2008Dec 2008May 2008May 2008
Dec 2006Dec 2006
Oct 2007Oct 2007
Mar 2004Mar 2004
First DeliveryFirst Delivery
Oct 2005Oct 2005Sep 2011Sep 2011
4Q12
900
Leadership in Commercial Aviation (70-120 seat
jets)
Leadership in Commercial Aviation (70-120 seat
jets)
60%
1%
1%1%3%
34%
Deliveries Market Share
43%
26%
4%4%
1%
13%
9%
Net Orders Market Share
Mitsubishi
Airbus
Bombardier
Bombardier
Comac
Sukhoi
E-Jets: since 200443% of orders 60% of deliveries
Boeing
Antonov
BoeingSukhoi
Antonov
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)
2012 Review
Jul: China’s Hebei Airlines ordered more five 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)
2012 Review
E-Jets around the world: 60+ Airlines from 40+ Countries
E-Jets around the world: 60+ Airlines from 40+ Countries
Oct/2012
Diversified Customer BaseDiversified Customer Base
E-Jets Customer Base (by Business Model)
E170/E175 E190/E195 E-Jets
74%
24%
48%
24%
43%
33%
2%
33%19%
LCCs
Full Service
Regional
(% of E-Jets Fleet+Backlog)
Source: Embraer (Jun/2012)
E-Jets efficiency in all business models
ECE: Excellence in Customer Experience
Aircraft Availability
QualifiedPeople
Low OperatingCost
Product Competitiveness
Global Presence
• Airline Support• Customer Care Center• Customer Relationship• Efficient Maintenance• Efficient Operation• Entry Into Service• Product Robustness, Support and Services
• MRO Network• Parts Availability• Product Improvements• Product Quality• Suppliers Management• Training
EC
E P
roje
cts
Customer Satisfaction
Highest levels of customer experience with Embraer products and services
E-Jets Historical Financing Sources
Source: Embraer Sales Financing
(Deliveries)
2004 2005 2006 2007 2008 2009 2010 2011 2012F 2013F0%
20%
40%
60%
80%
100%100% 100% 100% 100% 85% 73% 51% 63% 59% 62%
15%
27%
49%
37%41%
38%
5%9%
15%18%
21% 23%
ECA Support – E-Jets
ECA Support Mkt Acum ECA Support
13
4
8
12
17
21
27
2009
E-Jets strongly supported by leasing companies
Source: Embraer, as of Jun 2012
2004 2005 2006 2007 2008 2010 2011-2012
Yangtze River International Leasing
255 Leased/SLB E-Jets in 35 Airlines
33 Leasing and financial companies supporting E-Jets
E-Jets Versatile Applications
Natural growth for existing 50-seat markets
Right-sizing of low load-factor narrow-body flights
New market opportunities through lower risk and increased flexibility
Direct replacement of old and inefficient jets
E-Jets Deploymenthelping airlines to be more efficient
E-Jets Deploymenthelping airlines to be more efficient
Source: OAG (1Q12)
14%
31%
20%
28%
7%% of Markets
NB Replacement
NB Complement
Natural Growth
New Markets
Direct Re-placement
Right-sizing 45%
E175: Delta Shuttle Services
E175
Dec/08
E175
MD88
Jun/12Frequency 15 15
Seats 2,058 1,140
MD88MD88MD88MD88MD88MD88MD88MD88MD88MD88MD88MD88MD88
E175E175E175E175E175E175E175E175E175E175
E175
E175E175E175
New York (LGA) – Washington (DCA)
Source: OAG (1st week – Jun/2012) and Aviation Daily (May/2012)
Mar/2009: Delta shifted LGA-DCA to E175
Delta said that change improved its earnings on
the route by $13 million annually
May/2012: Delta losing $1 million per month on
LGA-BOS will replace A319 by E175. DL expects
an improvement of $20 million per year on the
route
Jun/12
Frequency 15 16
Seats 1,890 1,216
A319A319A319A319A319A319A319A319A319A319A319A319A319A319A319
New York (LGA) – Boston (BOS)
Sep/12
E175
E175E175E175E175E175E175E175E175E175E175
E175
E175E175E175
E175
E170/175 Helping DL to win in NY (LGA)
Source: BofA Merrill Lynch Conf. May/2012, OAG 2H2012
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
E-Jets on Prime Shuttle Markets
NY (LGA) – Wash. (DCA)
15x DailyE175
NY (LGA) – Chicago
13x DailyE175
Philadelphia - Boston
17x DailyE190/E175
NY (LGA) - Boston
15x DailyE190
NY (LGA) - Toronto
9x DailyE190/E175
Ottawa - Toronto
8x DailyE190/E175
Calgary - Vancouver
12x DailyE190
Source: OAG (1st. week – Jun/2012)
Vancouver
Calgary
Boston
NY
Chicago
Washington
TorontoOttawa
Philadelphia
Market Opportunities: US Scope Relaxation
100%
46%
100% 100% 100%
39%
100%
40%
100%
71%
54%61% 60%
29%
2000 2011 2000 2011 2000 2011 2000 2011 2000 2011
J30-60 J61-90
US Regional Jet Capacity Share (ASM by Segment)
Source: OAG
AA relaxation Unitedpotential CO scope relief
100+ units J61-90
AA: changes expected in the
short term (Chapter 11)
100+ units J61-90
Trend towards J75 ~70% of regional capacity
20-29 30-39 40-49
8%
52%40%
Market Opportunities for 61-90 Seat Jets
2011 RJ50 US Domestic Operation (1.9 Million Flights)
% o
f F
light
s
Natural GrowthOpportunities
Pax per Departure
Source: OAG / US DOT T100
40% of RJ50 flights with loads appropriated to 61-90 seat jets
Market Opportunities for 91-120 Seat Jets
2011 Narrowbody (NB) US Domestic Operation (3.4 Million Flights)
Right-SizingOpportunities (*)
% o
f F
light
s
Pax per Departure
Source: OAG / US DOT T100
34% of all NBs flights with loads appropriated to 91-120 seat jets
(*) Scope clauses restricting Regional Airlines operation, but some Mainline carriers are negotiating salary rates for
110-seater
Replacement Opportunities - World
B717-200B737-200
B737-500
737-600 F70 F28
F100
DC-9Bae 146
TU-134
YAK-42
0
50
100
150
200
250
300
350
5 15 25 35 45
Nu
mb
er o
f Air
craf
t
Average Age (years)
Source: OAG (Jun/2012 ; Passenger, Active in Service, Scheduled Services)
(Jets 61-120 seats)
More than 900 aircraft older than 15 years
32,800 new aircraft deliveries total market value of US$ 3.6
tri*
* At list price
TPs Jet 30-60 Jet 61-90 Jet 91-120 NB (121-210)
WB (201+)
2515
405
26253765
17305
6185
6,795 aircraft
(21%)
Projected Deliveries by SegmentProjected Deliveries by Segment
Market Outlook 2012-2031
Market Outlook 2012-2031
6,795 jet deliveries by world region
(30-120 seats)
6,795 jet deliveries by world region
(30-120 seats)2,195 North America 32%2,195 North America 32%
1,460 Europe 21%1,460 Europe 21%
1,005 China 15%1,005 China 15%
670 Latin America 11%670 Latin America 11%
505 Asia Pacific 7%505 Asia Pacific 7%
445 Russia/CIS 7%445 Russia/CIS 7%
305 Middle East 4%305 Middle East 4%
210 Africa 3%210 Africa 3%
Market Outlook 2012-2031
Market Outlook 2012-2031
120
110
100
90
80
70
60
Competition 61-120 seats – New Scenario
CRJ700
CRJ900
CRJ1000
SSJ95/100
737-7 MAX
MRJ90 ARJ21
CS100
CS300
E170
E175
E190
E195
A319 NEO
Typical Seating Capacity