Embraer projects market demand of 1,540 new jets in 70 to 130 seats segment for Europe and the CIS

Embraer forecasts a market demand of 1,540 new aircraft in the 70 to 130-seat jet segment (valued at US$80bn at list price) in Europe and the CIS over the next 20 years. Currently, there are 29 airlines operating Embraer jets in both regions. According to International Air Transport Association (IATA), European carriers’ total traffic increased by 3.5%, while load factor climbed to 81.9% in the first eight months of 2016. Air transport demand growth continues to face a number of headwinds, including terrorist attacks and political instability in parts of the region. However, the capacity/demand balance has been sustained by keen price competition. Yields have been decreasing 2% p.a. for the past five years. Despite the region’s wealth, high propensity for air travel and high load factors, Europe’s perennial woes are attributed to the weak revenue environment, resulting from a savagely competitive aviation market. Traditional Full Service Carriers restructured in order to improve efficiency, reduce costs and secure profitability. The focus on long-haul business passengers is now close to absolute. This, in turn, reinforces the importance of jets in the 70- to 130-seat segment to feed international flights. Hub efficiency is critically important and 70- to 130-seat jet aircraft play a key role feeding those hubs. The segment provides global and intra-region connectivity with ideal capacity to support regular frequencies at Europe’s key hubs.