10 February 2020, Monday 10:35:47

Embraer E195-E2 Debuts in Singapore Airshow

Embraer’s presence at this year’s Singapore Airshow features its latest and largest E-Jet the E195-E2.

Embraer’s presence at this year’s Singapore Airshow features its latest and largest E-Jet—the E195-E2. Making its show debut in the company’s “TechLion” livery, the E195-E2 on display here highlights the company’s commitment to the Asia-Pacific region in general and the airplane’s ability to deliver superior trip costs for short- to medium-length routes in particular, as Embraer Commercial Aircraft CEO John Slattery explained to AIN just before the start of the show.

“I think you will see carriers looking to adopt what I would refer to as an enhanced business model as they look to serve those secondary and tertiary markets in Asia,” Slattery said. “These would be thin routes, maybe a little longer routes that you couldn't serve with a turboprop. And you want to put a bit of frequency in there, so you want to keep those trip costs down. I think with the 190 and 195-E2 we have a unique opportunity for the Asian markets, from the Indian subcontinent all the way to Southeast Asia. That's why I think we have a lot of interest from the marquee airlines that will be visiting Singapore to take a meeting with Embraer this year.”

Slattery cited overcapacity in the Asian marketplace—driven largely by low-cost carriers inserting narrowbody capacity with airplanes such as Airbus A320s—as a big reason profitability has languished at some $3 a passenger in the region compared with about $16 among North American carriers, for example. In fact, LCCs now account for some 65 percent of the market in the Asia-Pacific region, giving them an outsized level of influence on market dynamics as a whole. Given their dominance, Slattery sees LCCs as a natural target for the E2s, notwithstanding the fact those airlines have done more to contribute to the overcapacity problem than the mainline carriers.

“I don't think there's any escaping that fact,” Slattery conceded. “It's fair to say that the market has taken off in the last two decades…the Asian market generally. And as the market has taken off, those airlines are looking to address an explosive demand from the population there. But also they want to consolidate their market share and their branding with customers. So it's a pretty standard positioning that the airlines have done. We saw it replicated effectively in all other parts of the world. So now I think the airlines will rotate their focus from market share onto profitability, and that's why we call the E2 family profit hunters.”

Embraer projects a 20-year demand in Asia-Pacific for 2,040 jets holding up to 150 seats, as well as another 950 turboprops, as the region turns its attention more toward smaller-gauge narrowbodies than in the past, when they’ve chased market share at the expense of yields. While Embraer’s penetration of the past decade has proved somewhat modest—at roughly 200 airplanes—the E195-E2’s 25 percent fuel-burn benefit over its E1 counterpart and range increase of 600 nm come at a time in which airlines turn their attention to yield generation.

“I think now is the opportunity,” said Slattery. "Now with the E2 family and because of the dynamics that I [referenced]…we believe airlines would start to pivot over to an incremental and adjacent business model, which is serving those secondary, tertiary markets with frequency. And you simply cannot do that profitably with larger-gauge equipment. The trip costs are too high."

Embraer E195-E2 Debuts in Singapore Airshow

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