Jul 28, 2017: Embraer’s revenues for the second quarter of Q17 increased from 29.5 percent to US$ 1,769.6 million, compared to US$ 1,366.4 million in 2Q16, driven by a combination of higher deliveries in the Commercial Aviation segment, a more constructive mix of deliveries in the Executive Jets segment, the start of the Brazilian Strategic Geostationary Defense & Communications (SGDC) satellite, and expansion in services revenues during the quarter. In 2Q17, the Company delivered 35 commercial and 24 executive jets (16 light jets and 8 large jets), for a total of 59 aircraft delivered during the quarter. This compares to deliveries of 52 aircraft in 2Q16, consisting of 26 commercial jets and 26 executive jets (23 light and 3 large). The increase in commercial jet deliveries led to a year-over-year revenue growth of 27.0 percent in Commercial Aviation, and in Executive Jets, the higher percentage of large jet deliveries (33 percent in 2Q17 vs. 12 percent in 2Q16) and growth in services resulted in a 16.0 percent increase in revenues as compared to last year’s second quarter. The Defense & Security segment’s revenues grew 59.7 percent in the quarter primarily due to the launch of the SGDC satellite in the first week of May.
In 2Q17 Embraer delivered 35 commercial jets, rising 35 percent compared to the previous year, as given below:
In April, Embraer commemorated the prolonged existence of its ERJ Programme, reaching 20 years of commercial operation of the 50-seat ERJ 145 jet, receiving 30 operators of the jet family for the two-day Embraer Operators Conference in Rio de Janeiro, Brazil. Across the years, Embraer achieved the impressive mark of more than 900 deliveries of this family of jets in the commercial aviation segment.
During the quarter, Embraer announced total firm orders for 22 E-Jets, including 12 existing generation E-Jets from five customers, as well as firm orders for 10 E-Jet E2s from an undisclosed customer. The total value of these orders goes beyond US$ 1 billion at current list prices.
The E-Jets customer base has been constantly expanding also through leasing and purchase of used aircraft. During the second quarter of 2017, S7 Airlines placed its 1st of 17 E170s into service, followed by Georgian Airways with E190s. South Africa’s Airlink received its 1st E190s, of which it will receive a total of 10 aircraft plus three E170s.
Existing E-Jet customers such as Aeroméxico Connect and Sky Regional have also grown their E190 and E175 fleets in recent months, with the former still awaiting deliveries of more aircraft in 2H2017.
Regarding the next generation E-Jets Programme, the E2, 2Q17 was marked by continued progression of the flight test campaign with five prototypes (4 E190-E2 and 1 E195-E2), reaching more than 1,000 flight-test hours and almost 3,000 ground-test hours.
The E190-E2 has already accomplished 55 percent of its test campaign. Also, the wing bending test was completed in May. The E195-E2 had its range increased from 2,450nm to 2,600nm, revealing an even enhanced performance than initially expected.
In the segment of commercial jets with 70 to 130 seats, Embraer maintains its leadership with more than 50 percent of the sales and 60 percent of the deliveries in the global market.
The Executive Jets segment delivered 16 light and 8 large jets, totaling 24 aircraft in 2Q17, compared to 26 deliveries in 2Q16.
During the second quarter of 2017, Embraer sold three Legacy 650Es to Germany’s Air Hamburg, which became the launch customer for this aircraft, and delivered the first Phenom 100 EV to markets such as Brazil and Mexico.
Also during the second quarter, two significant milestones took place. Embraer delivered its 1,100th business jet, a Phenom 300 for NetJets, and the European Aviation Safety Agency (EASA) granted type certification for the Phenom 100 EV.
In May, Embraer exhibited the most recent Lineage 1000E interior at EBACE and announced Surf Air’s selection of the Phenom 300 as the launch platform for its operations in Europe. In June, the Legacy 450 made its first appearance at the Paris Air Show.
Embraer continues to reinforce its global support network, with the appointment of JF services as an authorised Legacy 450/500 Service Center in Russia. The Company also announced during the second quarter that Embraer Executive Jet Services at Paris Le Bourget was approved by the FAA as a Part 145 repair station, allowing all Embraer business jets registered in the U.S. to be serviced at this facility.
Defense & security
In April, during the LAAD Defence & Security fair held in Rio de Janeiro, Savis and Bradar, affiliated companies of Embraer Defense & Security, announced a cooperation agreement with Rockwell Collins to mutually evaluate business opportunities in defense applications. During the Paris Air Show in June, Savis and Bradar also announced a contract with Thales to jointly evaluate business opportunities for civil and military air traffic control systems. These initiatives will improve the activities of Savis and Bradar in the global market, searching for existing complementary capabilities in the companies’ product lines.
In May, the Brazilian Geostationary Defense and Strategic Communications Satellite (SGDC) was successfully launched at the Guyana Space Center in Kourou, French Guiana. Visiona Tecnología Espacial was responsible for the integration of the SGDC Program which will offer coverage of Internet services throughout the Brazilian territory, as well as provide secure and sovereign means for the strategic communications of the Brazilian government.
In the same month, Embraer, together with its North American partner Sierra Nevada Corporation, was invited to participate in the U.S. Air Force’s (USAF) Capability Assessment of Light Attack Platforms with the A-29 Super Tucano. The evaluation for the OA-X programme is set to begin in July at Holloman Air Force Base in New Mexico. The OA-X experiment is part of the USAF’s effort to explore the benefits of acquiring an innovative, low-cost, non-developmental light attack aircraft to provide close air support and other missions in permissive and semi-permissive environments, reduce fighter pilot training costs, and accelerate pilot seasoning.
Regarding the KC-390 programme, the development and certification programme advanced as planned with the two prototypes exceeding the 1,000-hour mark. The aircraft was also exhibited at key aeronautical events such as the Paris Airshow, at which the aircraft was present with daily demonstration flights, and LAAD in Rio de Janeiro. After the Paris Air Show, the KC-390 started a roadshow for various Air Forces in countries in Europe, Asia-Pacific, Africa and the Middle East.
In June, Saab's next generation Gripen E made its first flight at Saab´s facilities in Linköping, Sweden, reaching a milestone for the aircraft on its way to achieve the 2019 deliveries schedule to both the Swedish and Brazilian Air Forces. Dozens of Embraer engineers remain dedicated, both in Brazil and Sweden, to the training and development activities of the Gripen NG programme together with Swedish engineers.
Atech, Embraer´s C4ISR and integrated systems company, continued to execute the programme to modernize Brazilian air traffic control systems (SAGITARIO), presented its new smart cities governance solution (Arkhe Governance), and signed contracts for software integration for activities with the Brazilian Navy.
Atech implemented the SAGITARIO (Advanced Air Traffic Information Management System and Reports of Operational Interest) system in the Vitória Approach Control Center. At the Smart City Business America 2017 Congress, the largest event for Smart Cities in Latin America held in the city of Curitiba, Atech presented the Arkhe Governance solution, a set of systems that enable integration and collaboration based on Command and Control systems focused on Governance. Also in 2Q17, Atech signed an addendum related to the H-XBR TDMS programme, which will extend the support of software integration activities from the embedded mission system of the naval employment helicopter.