One size does not fill all. This is true of many things, more so to do with aircraft in the airline business. One aircraft type is not the answer for air connectivity which is driven by national necessities, international movement, regional connectivity, and private aspirations. Accordingly the choice of aircraft, whether it is a large wide-body, medium wide-body, small wide-body, single aisle, regional jets, turboprops, or piston engines, is a call the operator has to take, to fit the business plan.

It all comes down to seat matrix for airline operations. Considering aircraft purchases and aircraft movement around the world, aircraft manufacturers have forecast what the market size would be for the next 20 years — till 2035. Boeing has forecast new airplane deliveries as large — wide-body 530, medium wide-body 3,470, small wide-body 5,100, single aisle 28,140 and regional jets 2,380, taking the total to 39,620. It has not made any forecast for turboprops. Canadian aircraft manufacturer has forecast 15,000 units by 2034 in the 60- to 150-seat segment and Brazilian aerospace major Embraer foresees world demand for 70/130-seat aircraft at 6,350 units, with 70-90 seats accounting for 2,250 units and 90-130 seats accounting for 4,100 units.

Emerging markets to drive demand

Though the projections of Boeing with that of Embraer and Bombardier vary considerably on the number of regional jets, it is believed that the emerging markets and even mature markets will drive the demand for a mix of aircraft and a significant number will be regional jets. These are based on estimates that the middle class will be a major contributor to traffic growth, expected to grow from 2.8 billion middle class flyers to 4.8 billion in 20 years. The 70/90-seat jets will sustain the hub-andspoke efficiency as these aircraft have the capability to link many lower-density markets to major hubs, while the 90/130-seat jets will complement the current narrow-body operations and develop new markets with lower risk. As regards turboprops, short-haul operations are expected to drive a worldwide demand for 2,050 turboprops with a capacity of 70 seats or more by 2034. Of these, 63 per cent will support market growth and 37 per cent will replace ageing aircraft. For mid- and longhaul operations, jet aircraft will continue to be more attractive because of their overall operational efficiency and schedule compatibility with narrow-body jets.

Embraer’s strategy

In this scenario, Embraer has its own strategy with its E-Jets and the incoming E-Jets E-2. Whether from the perspective of a primary or secondary market, E-Jets are compelling for their operational efficiencies, no middle seat, great fuel economics, besides the ability to sustain high re-marketing value and strong lease rates. This additional financial attraction will be even stronger with E-Jets E2, a true generational leap to help airlines maximise return on aircraft assets, Embraer has stated.

Embraer has been aggressively talking about ‘right-sizing’ as it is addressing four big issues that airlines are facing — the need to adequately match capacity demand; right-size fleets; explore markets and replace ageing fleets. Embraer has been up-guaging its seat capacities keeping in mind industry requirements and regional trends. It has tapped into the 70-110 seats by creating the E-Jets family. And now it sees the seat metrics scale up, as there is a huge gap between a regional jet and a narrow-body aircraft. The 130-seat segment was a gap to be filled and Embraer immediately reworked its strategy to fill the gap between a turboprop and a narrow-body airliner from either of the duopoly — Airbus or Boeing. Embraer predicts that this seat segment jet fleet will be the fastest growing among all aircraft seat segments.

Filling in the 70-130 gap

Across the globe, there is a continuous need for more network connectivity and frequency: the tremendous traffic growth in Asia, greater disposable income among a rising middle class in Africa and Latin America, continued strength in the United States and economic recovery in Europe. Planning for the future is always a tough challenge. Not only do airlines need to estimate their capacity requirements far in advance, they must also ensure that their investment in new equipment earns an acceptable return on those assets. Understanding how 70- to 130-seat aircraft influence that return is critical, Paulo Cesar de Souza e Silva, President and CEO of Embraer, had told SP’s Aviation when he was the President and CEO of Embraer Commercial Aviation.

THE PRESIDENT AND CEO OF EMBRAER COMMERCIAL AVIATION, JOHN SLATTERY HAS SAID THAT HIS COMPANY WAS POSITIONING ITSELF IN SUCH A WAY THAT IT WOULD COMPLEMENT AND NOT COMPETE WITH THE NARROWBODIES OF THE TWO AEROSPACE BEHEMOTHS

Jets have a superior revenue potential than turboprops. As emerging economies develop there is a trend for more competition among airlines and a desire for more convenience by passengers. The clear preference for jets against turboprops generally commands higher revenues and profits.

Embraer has broadened its offering from a maximum of 122 seats to a maximum of 132 and dropping its low-end E170 from future variants. This brings the EMB family to 90-132 seats, following the decision to undertake an extreme makeover of the current E175/190/195 line by adapting the Pratt & Whitney P1000 Geared Turbofan engine to a new wing design and upgrading a variety of systems in the E-Jet E2 which is likely to see entry-into-service for the E2 slated in 2018.

Embraer has the distinct advantage of positioning the E-Jets not just as regional jets but also as mainline airplanes that could “right-size” the airplane for the market, though smaller than the narrow-bodies of the duopoly Boeing and Airbus. The E-Jets have much shorter ranges, 2,880-3,520 kilometres capable of one-stop, trans-continental US routings or for instance from India could cover the nearby countries, well within the more common ranges of less than 1,600 km. And recently the E-Jets which entered service in 2004 and have touched 1,300 units sold till date. And now the E2 offers reduced fuel burn by 16-23 per cent depending on the sub-type.

The President and CEO of Embraer Commercial Aviation, John Slattery, has said that his company was positioning itself in such a way that it would complement and not compete with the narrow-bodies of the two aerospace behemoths. The company saw that there was not going to be a demand for the E170 and hence retired and grew the E195 by three rows and E175 by one row. “We have improved the range of both aircraft quite significantly, so we spent our time on product positioning and matching the product positioning with exactly what the airlines requirements were.”

He has said that Embraer’s strategy is the 70/130-plus-seat market with the aircraft range of 2,500 nautical miles (4,630 km), closer to 3,000 in the case of E190-E2 and 2,500 in the case of the E195-E2. That, we believe, is in the sweet spot of the airlines requirements. And our fuel burn benefits over the C Series are up to 10 per cent. The E195-E2, for example, is the same weight as the CS100, but it carries 10 per cent more passengers.” The shorthaul is going to be dominated by ATR’s turboprop aircraft.

Jets have a superior revenue potential than turboprops. As emerging economies develop there is a trend for more competition among airlines and a desire for more convenience by passengers. The clear preference for jets against turboprops generally commands higher revenues and profits.

FleetSmart

Embraer is talking about being FleetSmart which goes beyond the concept of right-sizing to deliver a complete fleet optimisation solution, putting the passenger experience at the heart of increased revenue opportunities.

“Almost a decade ago we published ‘The Rule of 70–110’, a market leading argument for a lower seat count enabling carriers to right-size their capacity to meet demand. We now believe that the market is set for another shift in its attitudes, with empowered passengers demanding greater levels of comfort whilst staying value-focused,” Embraer has stated.

“Well, we designed the E-Jet family in order to address the challenges of right-sizing in the 70/110-seat segment and the family has been enormously successful, with over 1,500 aircraft delivered to carriers all over the world. So we took the existing framework of the E-Jet family and analysed every single aspect, researching and developing solutions to optimise each and every nut, bolt, electronic system, passenger seat, cabin element from nose to tail. Working with an established aircraft family has allowed us to deliver clean-sheet improvements, with every small (and large) optimisation contributing to reductions in operational cost, drag, weight, maintenance costs and fuel burn,” Embraer further said.

With these developments jets have shown a superior revenue potential than turboprops. As emerging economies develop there is a trend for more competition among airlines and a desire for more convenience by passengers. The clear preference for jets against turboprops generally commands higher revenues and profits. All said and done, there is a market out there for all the different segments, though varying in numbers which is understandable.