2001 - Embraer Market Forecast

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<ul><li> 1. Embraer Market Forecast Jun 2001 </li></ul> <p> 2. ContentsQ Regional Airline Market Review Q The Regional Jet Phenomena Q Major Issues Impacting Future Demand Q Embraer Market ForecastJun 2001 3. Regional Airline Market Passengers by Region Passengers by Region Source: Airline Business Jun 2001 4. Regional Airline Market - USAPassengers Enplaned (millions)160139 14012010085 8060 Forecast 40 10%5% 20Average Projected Average Annual Growth Annual Growth01980 19821984 19861988 19901992 19941996 19982000 20022004 2006 20082010 Source: RAA, EmbraerJun 2001 5. US Regional Enplanements Increasing PassengerU.S. Regional Airlines Enplanements (Millions)% of Domestic Traffic 1,000 Major 800600400200 14% 12 %7%3% Regional0 1970 19701985 1985 20002000 2010F 2010F Source: RAA, FAA Jun 2001 6. US Regional Aircraft Size Increasing Average Seating CapacitySeats per Aircraft50 5040 4030 3020 2010 100 0 1990 19901995 19952000 2000 2010F2010F Source: FAA, RAA, EmbraerJun 2001 7. US Regional Aircraft Flying LongerAverage Trip Length (Km)750 750600 600450 450300 300150 150 00 1990 1990 19951995200020002010F2010F Source: FAA, RAA, EmbraerJun 2001 8. Regional Airline Market - EuropePassengers Enplaned (millions) 160 142140 120 100 80 72 60Forecast 4011%7%Average Projected Average20Annual Growth Annual Growth 0 2001 20022003 200420062007 20092010199319941995 19961997 19982000 20052008 1992 1999 Source: ERAA, EmbraerJun 2001 9. European Regional Aircraft Size Increasing Average Seating CapacitySeats per Aircraft80 80 70 70 60 60 50 50 40 40 30 30 20 20 10 10 0 0 1990 19901995 19952000 2000 2010F2010F Source: ERAA, EmbraerJun 2001 10. European Regional Aircraft Flying LongerAverage Trip Length (Km)750 750600 600450 450300 300150 1500 0 1990 1990 19951995200020002010F2010F Source: ERAA, EmbraerJun 2001 11. Jun 2001 12. Regional Jet Applications TurbopropComplement 12%New Routes 29% TurbopropReplacement9%JetJet ReplacementComplement 25% 25%Q Nearly 80% of regional jet applications come from new opportunities(capacity rightsizing, increased hub catchment area, new point to pointroutes), missions beyond the traditional turboprop roleSource: BACK Jun 2001 13. Regional Jet Stage Length - USA 180,000 2:40120,000Flight Time Annual Flights60,000 2000 19980 19960500 1,000 1,500 Sector Distance (km)Source: OAG BACKJun 2001 14. Continental Express NetworkTurboprop Cleveland Houston-MilwaukeeERJ (1585 km, 02:55)Newark Mont Rose(1490 km, 02:20)HoustonIxtapa (1510 km, 02:20)Source: OAG BACK Jun 2001 15. Regional Jet Productivity Continental Express Newark Hub example Continental Express Newark Hub example16%16%TurbopropTurboprop 100% 100%TurbopropTurboprop 84%84% Jet Jet 19961996200120011996199620012001 % Diff. % Diff.Daily DeparturesDaily Departures129129 110110-22 -22 AverageAverage 199199 406406+104 +104Sector Length (sm)Sector Length (sm) Daily ASMs (millions)Daily ASMs (millions) 1.061.061.981.98 +87 +87Source: OAG BACK Jun 2001 16. The Trend to All-Jet Fleet Hopkins AirportCleveland, OhioUSAJun 2001 17. Regional Jets are Replacing TurbopropsBaton RougeBloomington Greensboro Greenville Cedar Rapids Champaign Huntsville Indianapolis ChattanoogaCincinnatiKalamazooLa Crosse ClevelandColumbusMadisonMemphis Dayton Des MoinesMilwaukeeNW Arkansas DubuqueDuluthOmahaPeoria Evansville Fort WaynePittsburgh South Bend Grand Rapids Green Bay Toledo Traverse City Jun 2001 18. Regional Jet Stage Length - Europe90,0002:4060,000Flight Time Annual Flights30,000200020000 19981998 0 5001,000 1,500 Sector Distance (km)Source: OAG BACKJun 2001 19. Crossair NetworkStockholm (1500 km, 02:40)Turboprop ERJBaselZurichSevilla(1570 km, 02:30) Source: OAG BACK Jun 2001 20. LOT Polish Airlines Network Oslo (1070 km, 02:00) St. Petersburg(1030 km, 01:55)Turboprop ERJWarsawBucharest(930 km, 01:50)Nice(1390 km, 02:40)Source: OAG BACKJun 2001 21. RJ High Frequency starting in Europe From Bristol, UKFrom Bristol, UK Airlines: BA Airlines: BATo Edinburgh, UK To Edinburgh, UKDate/Time Date/Time 30/Jan/2001 06:00a 30/Jan/2001 06:00aDays DaysFlight Flight DepartDepart Arrive Arrive EqpEqp StopStop Duration Duration xSaSu BA 4032 xSaSu BA 40327:30a7:30aBRS BRS 8:45a 8:45aEDIEDI ERJERJ0 0 01:15 01:15 xSaSu BA 4034 xSaSu BA 40349:15a9:15aBRS BRS 10:30a 10:30a EDIEDI ERJERJ0 0 01:15 01:15 xSaSu BA 4036 xSaSu BA 40361:05p1:05pBRS BRS 2:20p 2:20pEDIEDI ERJERJ0 0 01:15 01:15 xSa xSa BA 4038 BA 40384:00p4:00pBRS BRS 5:15p 5:15pEDIEDI ERJERJ0 0 01:15 01:15 xSaSu xSaSu BA 4040 BA 40405:20p5:20pBRS BRS 6:35p 6:35pEDIEDI ERJERJ0 0 01:15 01:15 xSa xSa BA 4042 BA 40427:45p7:45pBRS BRS 9:00p 9:00pEDIEDI ERJERJ0 0 01:15 01:15 Jun 2001 22. RJs Complement with Larger Jets From Lisbon, PortugalAirline: Portugalia (NI) To Porto, PortugalDate: 04/Jun/2001 Days Flight Depart Arrive Eqp Stop DurationxSaSuNI 100 7:30a LIS8:15aOPO 1000 00:45 xSaNI 532 8:45a LIS9:30aOPO 1000 00:45 xSaSuNI 547 11:20aLIS12:05p OPO 1000 00:45 xSaSuNI 807 1:45p LIS2:30pOPO ERJ0 00:45 xSaNI 600 2:30p LIS3:15pOPO 1000 00:45 MoTuSu NI 816 3:05p LIS3:50pOPO ERJ0 00:45 xSaNI 720 4:00p LIS4:45pOPO ERJ0 00:45 xSaNI 533 5:10p LIS5:55pOPO 1000 00:45 xSaSu NI 1065:50p LIS6:35pOPO ERJ0 00:45 MoTu NI 809 6:45p LIS7:30pOPO 1000 00:45 xSaSu NI 1227:30p LIS8:15pOPO 1000 00:45 xSaNI 911 8:00p LIS8:45pOPO ERJ0 00:45 xSaNI 721 11:45pLIS0:30aOPO ERJ0 00:45Jun 2001 23. Responding to Market NeedsJun 2001 24. Responding to Market NeedsJun 2001 25. Responding to Market NeedsJun 2001 26. Anticipating Market Needs ERJ 170ERJ 17070 Seats 70 SeatsFirst FlightFirst Flight 2001 (Q4) 2001 (Q4)First Delivery 2002 (Q4)First Delivery 2002 (Q4)2,100 nm Range2,100 nm RangeERJ 190-200 108 SeatsERJ 190-200 108 SeatsFirst FlightFirst Flight 2003 (Q3) 2003 (Q3)First Delivery 2004 (Q2)First Delivery 2004 (Q2)1,800 nm Range1,800 nm Range ERJ 190-100 98 SeatsERJ 190-100 98 SeatsFirst FlightFirst Flight 2004 (Q3) 2004 (Q3)First Delivery 2005 (Q2)First Delivery 2005 (Q2)2,300 nm Range2,300 nm RangeJun 2001 27. Anticipating Market Needs Jun 2001 28. Market Issues Impacting Future Demand Jun 2001 29. Economic ScenarioReal GDP Growth (%) Countries representingCountry2001200220052006-2010 75% of World Capacity(aircraft up to 100 seats) USA1.9 3.7 3.3 3.2 Canada 2.7 3.6 3.2 3.0 France 2.1 2.3 3.0 2.9 Germany, UK, Italy1.7 1.8 2.7 2.6 France, Italy12%Germany 1.5 2.2 2.5 2.2UK2.6 3.0 2.4 2.4 OthersJapan 0.0 1.6 2.4 2.3 USA, Canada, 25%China 7.5 7.0 7.8 7.9 Mexico, BrazilAustralia 2.2 4.1 3.8 3.7 58% Japan, India,India 7.0 7.5 7.2 7.6 Australia,Brazil3.4 3.0 4.6 4.6China5% Mexico 2.4 5.8 5.0 5.0 WORLD2.0 3.1 3.4 3.3 Source:Merrill Lynch, Consensus Economics, OAG BACK Q The worldwide economic scenario is favorable to continuous growth of air transport traffic demand in the next 10 years Jun 2001 30. Scope Clauses - USA Q unlimited quantity for jets up to 59 seatsQ unlimited quantity for jets up to 44 seats, restriction of67 jets from 50 to 70 seatsQ unlimited quantity for jets up to 70 seatsQ nearly 400 units of jets up to 50 seatsQ unlimited quantity for jets up to 44 seats, up to 30units of jets from 45 to 50 seatsQ Reduced short term prospects for 70-seat jet in the USAQ In the medium to long term, airlines will work out labor agreements to meet theirmarket needsJun 2001 31. Scope Clauses - Europe Q Not as restrictive as in the USA.Q Usually around 100+ seats.Q Will allow for larger growth in the 60-120 seat segment.Jun 2001 32. Environment (Noise and Emissions)Q Regulations are becoming more stringent, imposing restrictions and taxes on higher noise and emissions airplanes.Q Environmental groups are pressing national governments to establish green taxes that could penalize airlines because of perceived aircraft pollution.Q Committee on Aviation and Environmental Protection (CAEP): studying policy options to define more stringent noise standards and to limit or reduce greenhouse gases emissions from civil aviation. Jun 2001 33. Congestion - USA% Reported Flight Operations arriving Delayed 35 3019981999200025 20 15 1050Continental AmericanDelta Source: US DOTQATC systems and airport infrastructure have not kept pace with air transport growth. Investments are required to be consistent with projected air transport growth. Jun 2001 34. Congestion - Europe% of Departures delayed more than 15 minDelays by Cause353010% 6% ATC (route)25 4%20Weather4%15Military10ATC (capacity)5076%Others1994 1995 1996 1997 1998 1999 2000Source: AEA Q Despite the collaborative approach under development with the air traffic service providers, air traffic flow management restrictions are the current main cause of delays.Q Single Sky concept (fifteen countries, one single sky - Eurocontrol) is the solution for current poor performance of the European fragmented ATC System, but the solution is more political than technical.Jun 2001 35. Market Forecast Jun 2001 36. Market Forecast 2001-201030-60 Seats 30-60 Seats 2,085 Jets 2,085 Jets Jun 2001 37. Market Forecast 2001-201061-90 Seats 61-90 Seats 1,200 Jets 1,200 Jets Jun 2001 38. Market Forecast 2001-201091-120 Seats 91-120 Seats 1,650 Jets 1,650 Jets Jun 2001 39. Market Forecast 2001-2010World Deliveries by Segment World Deliveries by SegmentSegmentType(Units)30 - 60 Jet 2085Turboprop290 30-60 TP 61-90 TP 5% 2% 61 - 90 Jet 1200 91-120 Jet31%30-60 JetTurboprop110 40%91 - 120Jet 1650 61-90 JetTotal533522% Jet 4935 TP 400 World (30-120 seat segment): 4935 jets (US$115 Billion) World (30-120 seat segment): 4935 jets (US$115 Billion)Jun 2001 40. Market Forecast 2001-201030-120 Seats 30-120 Seats 4,935 Jets 4,935 Jets Jun 2001 41. Embraer Commercial Aircraft Products from turboprops... to commercial jets ERJ 170 ERJ 135EMB 110ERJ 140ERJ 190-100EMB 120 ERJ 190-200ERJ 145 Jun 2001 42. Worldwide Program Order Book Firm Firm DeliveriesDeliveriesFirmFirm Options Options Orders OrdersBacklog BacklogERJ 135/140/145 FamilyERJ 135/140/145 Family 836 836 418 418 418 418401401ERJ 170/190 FamilyERJ 170/190 Family 120 12000120 120205205 Total ERJTotal ERJ956 956 418 418 538 538606606May 2001 Jun 2001 43. Thank you!Jun 2001 </p>