The Embraer 190 Embraer
The Embraer 190 is currently the most successful aircraft in the 100-150-seat market.

Stepping Up: What’s Next For Embraer 190/195?

The 100-seat aircraft market already has five players, and with Boeing and Embraer’s new joint venture—and Airbus’s A220 play—the market has just become more dynamic.

Printed headline: Middle Market Pole Position?

 

The downfall of the 50-seat commercial jet began in the early 2000s, when oil prices started an unprecedented climb, and was sealed by the 2007-08 financial crisis. During the 1990s, the aircraft were incredibly popular with U.S. regional carriers, until in later years rising fuel prices and low-cost carrier (LCC) competition exposed their poor per-seat economics.

With demand shifting to larger-capacity aircraft, Brazilian manufacturer Embraer launched the 72-seat Embraer 170 and 100-seat Embraer 190 (single-class configurations) in 1999. The latter aircraft was boosted by a big order from one of America’s leading LCCs, JetBlue, which received its first E190 in 2005. A year later, British carrier Flybe received the first of a larger variant, the 116-seat E195.

Of Embraer’s two biggest aircraft, the E190 has proved most popular, with 588 in service in 2018 compared with 158 E195s, according to the Aviation Week 2018 Commercial Fleet & MRO Forecast, which also predicts 605 E190s to be in operation by 2022.

Competition

Although Aviation Week forecasts no growth in E195 numbers in the next five years, the Embraer 190 and 195 have emerged as winners, at least for now in this most competitive aircraft segment. While orders for larger narrowbodies and widebodies are split between Airbus and Boeing, five manufacturers offer aircraft with around 100 seats. Of Embraer’s closest competitors, Bombardier has just more than 300 CRJ900s and CRJ1000s in service, while the Airbus A220-100, formerly known as the Bombardier CS100, has won roughly 115 orders. Sukhoi has more, but struggles to sell the Superjet SSJ100 outside Russia, while Mitsubishi has failed to gain traction for its long-delayed MRJ series.

Many analysts now dismiss Bombardier, Sukhoi or Mitsubishi as serious rivals to Embraer in the 100-150-seat market. This leaves Embraer’s updated variants, the E190-E2 and E195-E2, and the Airbus A220-100 and A220-300 as the main competition to the current-generation E190 and E195. Airbus’ new aircraft joined its roster after the European manufacturer finalized a controlling stake in Bombardier’s former C Series program in July. 

Embraer’s E2 models feature the Pratt & Whitney PW1900G variant of the geared turbofan family, which also flies on the A220 and A320neo, as well as optimized wings to deliver a double-digit fuel-burn advantage over earlier GE CF34-10E-powered versions. The first E190-E2 was delivered in April, but Embraer expects the aircraft will comprise only 5-10% of its total deliveries in 2018.

Embraer

The Embraer 190 is currently the most successful aircraft in the 100-150-seat market.

“At mature levels, we expect the E190/195-E2 to account for more than 50% of the total E-Jets deliveries,” says Embraer’s vice president for marketing, Rodrigo Silva e Souza. In 2022, Aviation Week forecasts only seven E190/195 deliveries but 55 of the E2 variant.

Uncertainties

Assessing the future of the E190/195 lines is complicated by uncertainty about future fuel prices and the impact of Airbus’ takeover on the former C Series program, which experienced slow sales under Bombardier.

Low fuel prices until the beginning of 2018 did soften demand for the reengined E2, says Silva e Souza, although he thinks that will change if oil prices, up 50% in the past 12 months, sustain recent increases: “In the last 12 months, we have experienced a significant increase in interest in the E2, and this will likely be converted into announcements of new sales soon,” he says.

A bigger worry for Embraer, then, is if Airbus’ extra sales and marketing clout transforms the fortunes of the former C Series program. Evidence for this emerged recently when JetBlue, which launched the E190 in spectacular fashion, chose the A220-300 and not the E2 as a replacement with a memorandum of understanding for 60 aircraft.

With a typical configuration of 116 seats, the A220-100 competes directly with the E195 and E190-E2, while the 141-seat A220-300 is close to the market of the E195-E2, which can fit up to 146 seats in a high-density configuration.

“No doubt, Airbus makes the C Series stronger,” says Silva e Souza. “It addresses two critical issues of the program since its launch: the questionable sustainability of Bombardier in commercial aviation and the negative perception about its customer support.”

On the plus side, however, he thinks that Airbus may stimulate new demand for small narrowbodies in general, a market segment still not fully proven. “We believe Airbus will enlarge the segment, bringing also more opportunities for the E2, and at the end of the day customers will compare the two aircraft and conclude that the E2 is more efficient,” he says.

Embraer

The Embraer 195-E2 can fit 146 seats in a high-density configuration.

Embraer expects one-third of all deliveries of 100-150-seat aircraft to replace existing equipment of a similar size and the other two-thirds to serve new demand and the replacement of larger narrowbodies or smaller regional aircraft. By March of this year Embraer had sold nearly 1,000 current- and new-generation E190/195s and had 227 firm orders in its backlog.

Another potential benefit of Airbus’ C Series takeover—though not mentioned by Silva e Souza—is that it pushes Embraer into the arms of Boeing and its considerably greater resources. After Inside MRO’s interview with Embraer in July, the Brazilian manufacturer signed a memorandum of understanding with Boeing to establish a joint venture covering Embraer’s commercial aircraft and services business. Boeing would own 80% of the venture, which it values at $4.75 billion.

Aftermarket

Although the E2 line uses Pratt’s geared turbofan, Embraer says it has avoided any of the problems that affected the PW1100G-powered A320neo. “We have planned a very smooth ramp-up to avoid issues like that and also to make sure we have the necessary available parts to support the aircraft in service,” says Silva e Souza.

Today, most Embraer support activity is for current-generation E190/195 types rather than E2 models, which only entered service this year. Aviation Week calculates that the MRO market for current-generation models is worth roughly $1.1 billion in 2018, rising to about $1.3 billion in 2022. By then, many more E2s will be flying, although the aftermarket for E190/195-E2s will still only be worth about $90 million.

Major MRO facilities for the E190/195 are Embraer Aircraft Maintenance Services in Tennessee, TAP Maintenance & Engineering Brazil and OGMA Aviation Services in Portugal. 

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