2007* airline marketing embraer day 2007

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Airline Market & Embraer Programs Overviews A perspective from the 30 to 120-seat segment Airline Market & Embraer Programs Overviews A perspective from the 30 to 120-seat segment Nov/2007 Nov/2007 Mauro Kern Exec. VP Airline Market Embraer Day 2007 Nov 14th, 2007 Embraer Day 2007 Nov 14th, 2007

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Page 1: 2007* Airline Marketing Embraer Day 2007

Airline Market & Embraer Programs OverviewsA perspective from the 30 to 120-seat segment

Airline Market & Embraer Programs OverviewsA perspective from the 30 to 120-seat segment

Nov/2007 Nov/2007

Mauro Kern

Exec. VP Airline Market

Embraer Day 2007Nov 14th, 2007

Embraer Day 2007Nov 14th, 2007

Page 2: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

� Air Transport Industry Review

� 50-seat Regional Jet Market & the ERJ145 Family

� 70 to 120-seat Market Evolution & the E-Jets

� Embraer Market Forecast

Contents

Page 3: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Strong Air Transport Demand

Source: ICAO - Contracting States - Scheduled Airlines

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

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20

02

20

03

20

04

20

05

20

06

20

07

F

20

08

F

To

tal R

PK

(T

rillio

n)

3.5% 6.2% 5.7%

RPK Average Annual Growth Rates

-0.4% 9.5%

Page 4: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

0

2

4

6

8

10

12

14

1Q00

2Q00

3Q00

4Q00

1Q01

2Q01

3Q01

4Q01

1Q02

2Q02

3Q02

4Q02

1Q03

2Q03

3Q03

4Q03

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

CA

SM

(U

/AS

M)

• 2Q 2007 Fuel costs = 24% & Labor = 25% of Ops Cost, while 12% & 34% in 2Q2000.

• Fuel costs are offsetting labor cost restructuring savings.

• Cost Control: Total Cost (Excluding Fuel) has remained flat since 2002.

Source: ATA (Airline Cost Index)

Strong Effort to Reduce Costs vs. Fuel Increase

Total Cost

Total Cost (excl. Fuel)

Labor

Fuel

US CASM data

Page 5: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Positive Net Results Projected for 2007 & 2008

Source: IATA Economics Sep/07 (ICAO data to 2006 and IATA Forecast 2007-2008)

Europe

Values in US$ Billions

US net results includes restructuring costs andexcludes United Airlines ‘fresh-start’ accounting losses and gains

AfricaLatin America

North America

Middle East

Asia Pacific

World

05 06 07F2004 08F

-6.7 -2.7 2.7-10 2.5

1.6 1.8 2.11.1 3.0

05 06 07F2004 08F

0.2 0.2 0.20.2 0.3

05 06 07F2004 08F

-0.1 -0.2 -0.10.1 0.1

05 06 07F2004 08F

-0.4 -0.4 -0.1-0.3 0.0

05 06 07F2004 08F

1.2 0.8 0.73.4 2.0

05 06 07F2004 08F

-4.1 -0.5 5.6-5.6 7.8

05 06 07F2004 08F

Page 6: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

TP

< 3

0

TP

30-6

0

TP

61-9

0

Jet

30-6

0

Jet

61-9

0

Jet

91-1

20

Jet

121-1

45

Jet

146-1

75

Jet

176-2

10

Jet

211-3

00

Jet

301-4

00

Jet

>400

Nu

mb

er

of

Air

cra

ft (

Un

its)

> 30

26-30

21-25

16-20

11-15

6-10

0-5

Source: BACK (Sep/07)

WW Fleet Profile - 18,914 aircraft

Scheduled Airlines, All Passenger Configuration and Active in Service

Age (years)

941

1,751

462

2,057

3,531

921

3,563

1,040

509

1,088

1,4211,630

Page 7: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Environment: becoming a Critical Issue

Increasingly negative public

image >> a pollution symbol

Current main focus from NGOs,

media, and politicians

The main driver for next

generation engines and aircraft

Industry working to present real

facts, based on technical and

economic arguments

but…

Aviation is currently responsible for

2.9% of all CO2 emissions, and expected

to increase to 3.3% by 2050*.

97.10%

2.90%

All Other Sources

Aviation

96.70%

3.30%

All Other Sources

Aviation

2006 2050

*IPCC Report Aviation and the Global Atmosphere (1999; scenario FE1); IPCC Report on Emissions Scenarios (2000; Scenario A1F1) and BACK (2006)

Page 8: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Air Transport Industry Main Drivers

• New Passenger Profile � Different Set of Values (pricing, comfort,

more frequencies and direct services)

• Increased Competition � Pressure for Differentiated Services

• Weak Revenue Environment � Requires Continuous Cost Reductions,

Improved Productivity and Efficiency

• Regulatory: Liberalization � Opportunities for New Entrants

• Regulatory: Environment � Increased Costs – may reduce demand

• Old Fleet � Additional Costs: Fuel & Maintenance

• Fuel Prices � Increased Costs – may reduce demand

• Demand vs. Capacity � Need of a Better Match of Market

Demand and Aircraft Capacity

Driver Consequence

Page 9: 2007* Airline Marketing Embraer Day 2007

ERJ 145 Family

Page 10: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

51

51

-

-

FirmBacklog

864131915Total

682131733ERJ 145

74-74ERJ 140

108-108ERJ 135

DeliveriesOptionsFirm

Orders

ERJ 145 Family Order Book

(September 30th., 2007)

Page 11: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Dec 1998Dec 1998

Dec 1999Dec 1999

Aug 2000Aug 2000

Mar 2001Mar 2001 Sep 2001Sep 2001 May 2003May 2003

Dec 1996Dec 1996

First DeliveryFirst Delivery

May 2002May 2002 Feb 2005Feb 2005May 2004May 2004

1,000 ERJ145 Platforms Already Delivered

September, 2007

Page 12: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Market Share - World (30-60 seats)

45

32

17

7

52

48 47 45 46 4745 4748

5252

48

5556 55 54 53

68

83

93

53 53

0

10

20

30

40

50

60

70

80

90

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Oct/07

(%)

Embraer: ERJ 145/140/135

Bombardier: CRJ100/200/440

Page 13: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

RJ50s Current Situation

• Worldwide FIS (Sep/07): 2057 aircraft

• 66% in the US; 13% in Europe; 9% in the CIS and 12% in ROW

• Parked aircraft (in storage): 22 CRJs; 2 ERJs; 17 others

• only 2% of the total fleet – a stable market

• RJ50s: responsible for nearly 30% of US domestic departures

• China´s regional airline industry starts to develop; FIS = 73 RJ50s

• Secondary market being developed: Mexico, Eastern Europe and

Africa

Source: BACK (Sep/07; FIS=Scheduled airlines and A/C active in service)

Page 14: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

China: New Opportunities for Regional Airlines

• Will operated 50 145s+ 50 E190s.

• Started operation with 328s, which will be gradually

phased out along the introduction of ERJ145

• Started operation in September 2006 with used RJ50s

leased from Shandong airlines that also provides pilots.

• Plan a fleet of 50-100 aircraft in the long term.

• Started operation in September 2007 with used RJ50s

leased from Mesa

• Looking for a fleet of 160-200 aircraft including 50 and

100 seaters

China Express

Kunpeng (Shenzhen & Mesa JV)

Grand China Express (Hainan)

Page 15: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Source: BACK (Mar/07)

RJ50 Market Opportunities – Russia/CIS

187 188149

0

50

100

150

200

Turboprop Jet 30-60 Jet 61-90

Nu

mb

er

of

Air

cra

ft

An-24

50 seats

Avg. Age

35 years

Yak-40

30 seats

Avg. Age

32 years

Tu-134

76 seats

Avg. Age

29 years

Old fleet replacement is needed in the short term: 524 aircraft affected

Replacement already started: Dniproavia / ERJ145; Soyuz / EMB120

Page 16: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

ERJ135 / ERJ140 Higher Density Studies

•ERJ 135 = 37 seats ���� ERJ 135HD = 41 seats

•ERJ 140 = 44 seats ���� ERJ 140HD = 48 seats

• Removal of aft lavatory and Installation of a new lavatory at aircraft fwd.

• Add one four abreast row where lavatory was originally installed.

Page 17: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

ERJ 145 Family Shedule Reliability Status

ERJ145 - SCHEDULE RELIABILITY AND COMPLETION RATE

97.00

97.50

98.00

98.50

99.00

99.50

100.00

JA

N

FE

BM

AR

AP

R

MA

Y

JU

N

JU

LA

UG

SE

P

OC

T

NO

VD

EC

JA

N

FE

B

MA

R

AP

RM

AY

JU

N

JU

L

AU

GS

EP

OC

T

NO

V

DE

C

JA

NF

EB

MA

R

AP

R

MA

YJU

N

JU

L

AU

G

SE

P

OC

TN

OV

DE

C

2005 2006 2007

SR

& C

R (

%)

SR CR

Page 18: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00

10,00

2002

Q4

2003

Q1

2003

Q2

2003

Q3

2003

Q4

2004

Q1

2004

Q2

2004

Q3

2004

Q4

2005

Q1

2005

Q2

2005

Q3

2005

Q4

2006

Q1

2006

Q2

2006

Q3

2006

Q4

2007

Q1

2007

Q2

2007

Q3

2007

Q4

US

$ M

illi

on

s

ERJ-145

CRJ-200

RV@ 12 years

Residual Value Evolution (RJ50s)

Source: average of 12 representative industry Appraisers

Page 19: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

RJ 50s Future Market Trends

• Market entered a mature phase in the US and Europe

• RJ50s will remain the backbone of US hub feeding system

• Some new market opportunities (long and thin) in the US and EU

• Potential for regional aviation development in China and Russia

• Secondary market will keep expanding

Page 20: 2007* Airline Marketing Embraer Day 2007

E-Jets FamilyHelping airlines

to improve efficiency

Page 21: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E-Jets Family

EMBRAER 170• 70 to 80 Seats• 2,100 nm Range• Certification – February 2004

EMBRAER 170/175

EMBRAER 190/195

EMBRAER 175• 78 to 88 Seats• 2,000 nm Range• Certification – December 2004

EMBRAER 190• 98 to 114 Seats• 2,400 nm Range • Certification – August 2005

EMBRAER 195• 108 to 122 Seats• 2,200 nm Range• Certification – June 2006

Page 22: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E-Jets Family - Main Applications

� Natural evolution for existing 50-seat markets

� Right-sizing of low load-factor narrow-body flights

���� Capacity, range & seamless service

���� Enhancing services by increasing frequencies

� New market opportunities – low risk development

���� Medium density and long/thin markets

� Replacement of old & inefficient jets

Page 23: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

0%

20%

40%

60%

80%

100%

2000

2007

2000

2007

2000

2007

2000

2007

2000

2007

2000

2007

AS

M O

ffe

red

30-60 61-90

US Regionals: Trend towards high capacity aircraft

Capacity Share by Segment - Jets

Source: BACK

Page 24: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

30% of 61-120 fleet

(735 acft) with more

than 20 years

0

100

200

300

400

500

600

700

800

0-5 6-10 11-15 16-20 21-25 26-30 31-35 >35

Age (Years)

Nu

mb

er

of

Air

cra

ft

Source: BACK (Oct/06)

World Market Opportunities – Replacement

World Fleet Age Profile (61-120 seats): 2,454 jets / 15 years average age

152,454World

838China

19241Asia Pacific

1648Middle East

22148Africa

23231Russia & CIS

11617Europe

23285Latin America

10846North America

Avg. Age

# Acft.Region

735 aircraft will be eligible for replacement in the coming years;

retirement may be antecipated due to fuel costs

Page 25: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

*500 nm sector, 100% Load Factor.

0%

20%

40%

60%

80%

100%

120%

140%

160%

E170 E175 BAe 146-

100

BAe 146-

200

F70 RJ85 DC9-10

+53%

Comparison: Fuel / CO2 Emissions

CO2 Emissions*: 61 to 90-seat segment

The E-Jets Family offers substantial fleet renewal benefits with fuel / emission reductions up to 50%.

Page 26: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

0%

20%

40%

60%

80%

100%

120%

140%

160%

E190 E195 B717 B737-

200

B737-

300

B737-

500

F100 MD87 RJ100 DC9-30

+50%

Comparison: Fuel / CO2 Emissions

CO2 Emissions*: 91 to 120-seat segment

*500 nm sector, 100% Load Factor.

The E-Jets Family offers substantial fleet renewal benefits with fuel / emission reductions up to 50%.

Page 27: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Short Term Fleet Renewal Benefits

E-Jets can bring immediate fuel / emissions savings of up to 50%

Page 28: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E-Jets Joint Certification means Flexibility

Same Type Design for ANAC, FAA and EASA

EASAFAA

Market swap flexibility

Increased residual value

July 2006July 2007June 2006EMBRAER 195

January 2005August 2006December 2004EMBRAER 175

June 2006September, 2005August 2005EMBRAER 190

February 2004February 2004EMBRAER 170

EASAFAAANAC

Page 29: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Training Qualification Differences : According to FAA AC 120- 53, grades range from A (best) to E (worst) in 3 categories: Training Differences, Check Differences and Recurrent Training

E-Jets Commonality

Training ���� 70% of the potential benefits

same cockpit, common systems and fly-by-wire technology mean maximum training commonality within the family

-------A/A/AA/A/AA/A/A195

A/A/A-------A/A/AA/A/A190

A/A/AA/A/A-------A/A/A175

A/A/AA/A/AA/A/A-------170

195190175170EMBRAER

E-Jets have the maximum training commonality (A/A/A)

E-Jets offer an outstanding parts commonality (86% to 100%)

Spare Parts ���� 30% of the potential benefits

E190

E195

86%

E170

E175

Based on the aircraft RSPL (Recommended Spare Parts List)Note: Airframe and Ground Servicing Equipment only (Engines are not included).

100%

100%

Page 30: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

“Passengers love this aircraft for its spacious interior design and in particular the absence of a middle seat.” Bryan Bedford, CEO Republic Airways (Jul/06)

“The comfort of the E175 aircraft is important to our customers and theeconomics of the aircraft make good business sense.” Scott Kirby, US Airways EVP Sales

and Marketing (Jul/06)

The Comfort Factor

CRJ700/90017.3”

16”

EMBRAER 170/190

18.25”

19.75”

A318/32018.0”

19”

Widest seats

Widest aisles

No middle seats

0.25” (0.6 cm) wider seats

0.75” (1.9 cm) wider aisle

Equal volume per seat

0.95” (2.4cm) wider seats

3.75” (9.5cm) wider aisle (+23%)

16% more volume per seat

E170/190 advantages:

E-Jets: Narrowbody airplane comfort in more convenient sizes

Page 31: 2007* Airline Marketing Embraer Day 2007

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51355368

60586310

7563

0

1000

2000

3000

4000

5000

6000

7000

8000

E170 E175 E190 E195 A319 /

B737-700

US

$ p

er

Tri

pThe Trip Cost Factor

US Domestic

Network Airline -

800 sm trip

Costs exclude: revenue related costs and system (overhead) costs

Costs include: variable: fuel, crew, maintenance, landing fees, handling fees ; ownership: lease cost, hull insurance, spares inventory costs

2-class seating: 70 78 94 104 124

Airplane Variable

plus Ownership

Costs per Trip

- 32%- 20%

E-Jets: Lower trip costs than comparable airplane sizes

Page 32: 2007* Airline Marketing Embraer Day 2007

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Air Canada – Merrill Lynch Global Transportation Conference (Jun/2007)

COPY

Domestic

International

Page 33: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

42106552EMBRAER 195

420

292

60

26

FirmBacklog

292756712Total

99432391EMBRAER 190

46136106EMBRAER 175

137123163EMBRAER 170

DeliveriesOptionsFirm

Orders

E-Jets Family Order Book

(September 30th., 2007)

Page 34: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Market Share - World (61-120 seats)

252

38

232122

17

46464444

4032

3639

38

4442

33 34

25

57

911

100 100

99

60

28

17 16 16

4

121621

2930

69

82

52 2

0

10

20

30

40

50

60

70

80

90

100

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Oct/07

(%)

Embraer: 170/175/190/195

Bombardier: CRJ700/900/1000

Airbus: A318

Boeing: B737-600

AVIC I: ARJ-21

Sukhoi: Superjet 100

Antonov: An-148

Page 35: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

60

110 112 118

245

343

440

712

619

0

100

200

300

400

500

600

700

800

1999 2000 2001 2002 2003 2004 2005 2006 Sep/2007

Accu

mu

late

d F

irm

Ord

ers

E-Jets Customer Base Evolution

Source: Embraer

Deliveries

1 2 3 4 9 14 19 29 40Customers/Operators

Page 36: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E-Jets Worldwide Distribution

Growing and diversified customer-base across five continents.

Increased presence in emerging markets with established carriers.

10%

18%53%

14%

5%

Asia Pacific /China

Middle East /Africa

Europe

Latin America

North America

19%

26%

19%19%

17%

Customers Firm Orders

Source: Embraer (Sep/07)

Page 37: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

0

50

100

150

200

250

300

350

1Q04

2Q04

3Q04

4Q04

1Q05

2Q05

3Q05

4Q05

1Q06

2Q06

3Q06

4Q06

1Q07

2Q07

3Q07

Ac

cu

mu

late

d D

eli

ve

rie

s (

un

its

)

E-Jets Delivery Pace Evolution1st Delivery -

Mar/2004 200th: Dec/2006100th: Oct/2005 300th: Oct/2007

Page 38: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

13 E175

4 E170

28 E170

E-Jets

Sep/07

16 E170

49 E1908 E190

32 E1754 E175

11 E19015 E175

34 E190

190183

13 E17528 E170

17 E175

72 E19029 E190

BacklogDeliveries

Source: BACK (4Q06), Embraer

E-Jets Deployment in North America

40% 42% 18%

0% 20% 40% 60% 80% 100%

Natural Growth Right-sizing New Routes

Page 39: 2007* Airline Marketing Embraer Day 2007

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E170 Denver – Dayton

942 nm ; 2:47 (1 Daily)

E170 Edmonton – Chicago

1,231 nm; 3:10 (1 Daily)

E190 Boston – Austin

1,470 nm ; 4:10 (1 Daily)

E190 New York-Calgary

1,768 nm ; 5:20 (2 Daily)

Airline

E175 Philadelphia – Houston

1,150 nm ; 3:30 (2 Daily)

E170 New York – Austin

1,316 nm ; 4:10 (1 Daily)

Longest Route

Source: BACK (Jul/07)

E-Jets Deployment in domestic long haul

Efficiency and flexibility also for long haul domestic/transborder markets

Page 40: 2007* Airline Marketing Embraer Day 2007

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2 E195

10 E190

10 E195

5 E190

6 E170 6 E190

4 E190

30 E190

8 E1956 E195

6 E19010 E170

4 E190

6 E170

E-Jets

Sep/07

83 48

10 E1706 E175

2 E170

BacklogDeliveries

Source: BACK (4Q06), Embraer

41% 53% 3%

0% 20% 40% 60% 80% 100%

Natural Growth Right-sizing New Routes

E-Jets Deployment in Europe

Page 41: 2007* Airline Marketing Embraer Day 2007

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E-Jets Deployment in Middle East & Africa

2 E170

1 E1702 E170

6 E170

15 E170

E-Jets

Sep/07

628

1 E170

2 E175

1 E195 4 E195

BacklogDeliveries

Source: BACK (Jan/07), Embraer

5% 86% 9%

0% 20% 40% 60% 80% 100%

Natural Growth Right-sizing New Routes

Page 42: 2007* Airline Marketing Embraer Day 2007

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1 E170

1 E170

2 E170

3 E175

5 E1902 E190

10 E170

50 E190

E-Jets

Sep/07

8410

5 E170

14 E1901 E170

BacklogDeliveries

Source: Embraer

E-Jets Deployment in Asia Pacific & China

Page 43: 2007* Airline Marketing Embraer Day 2007

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E-Jets Deployment in Latin America

20 E195

4 E190

2 E1902 E170

1 E190

2 E170

5 E190 10 E190

8 E190

E-Jets

Sep/07

3224

1 E1901 E175

BacklogDeliveries

Source: BACK (3Q07), Embraer

27% 58% 15%

0% 20% 40% 60% 80% 100%

Natural Growth Right-sizing New Routes

Page 44: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E-Jets – more than 1,000,000 Flight Hours

(*) Air Canada, Finnair and TAME operate aircraft of both subfamilies

Operators 18 Operators 11

Aircraft in Service 181 Aircraft in Service 109

Flight Hours 861,698 Flight Hours 238,362

Flight Cycles 608,493 Flight Cycles 149,492

Fleet Leader Fleet Leader

Flight Hours (Republic S/N 0016) 9,430 Flight Hours (Air Canada S/N 0013) 4,974

Flight Cycles (Republic S/N 0016) 6,618 Flight Cycles (JetBlue S/N 008) 3,402

Operators*

Aircraft in Service

Flight Hours

Flight Cycles

1,100,060

757,985

E170/190 Family

E170/175 E190/195

26

290

Source: Airlines (as of Sep 30th, 2007)

Page 45: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E170/190

2006 2007 2008 2009

New Higher Thrust

Engine Version

CF34-10E7

HUD Repeater

+

LVTO 170 �

E-Jets Continuous Product Evolution

EFB

CAT III B 170

CAT III A Autoland190

CAT III HGS 195

CAT III A Autoland 175

CAT III HGS 190

Steep Approach 170

�“… (E-190 flightcrew) will be able to fly every approach the same way, in good weather and in bad, from the left seat or the right seat, to ILS-equipped runways or on non-precision approaches”Usto Schutz, JetBlue’s VP (E190 Program)

“… (E-190 flightcrew) will be able to fly every approach the same way, in good weather and in bad, from the left seat or the right seat, to ILS-equipped runways or on non-precision approaches”Usto Schutz, JetBlue’s VP (E190 Program)

ETOPS 190 (75’)�

Page 46: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

2006 2007 2008 2009

CAT IIIA Autoland 195

• Steep Approach 190

E175 AR

E170 AR

…creating value to customers.

E-Jets Continuous Product Evolution…

ETOPS 190 (120’’)

Page 47: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E170/175 Schedule Reliability Status

Page 48: 2007* Airline Marketing Embraer Day 2007

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E190/195 Schedule Reliability Status

Page 49: 2007* Airline Marketing Embraer Day 2007

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0,00

1,00

2,00

3,00

4,00

5,00

6,00

7,00

8,00

9,00

10,00

11,00

12,00

13,00

14,00

15,00

16,00

2002

Q4

2003

Q1

2003

Q2

2003

Q3

2003

Q4

2004

Q1

2004

Q2

2004

Q3

2004

Q4

2005

Q1

2005

Q2

2005

Q3

2005

Q4

2006

Q1

2006

Q2

2006

Q3

2006

Q4

2007

Q1

2007

Q2

2007

Q3

2007

Q4

US

$ M

illio

ns

Embraer 190

Embraer 195

B737-600

A318

RV@ 12 years

Residual Value Evolution (100 seaters)

Source: average of 12 representative industry Appraisers

Page 50: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

70 to 120-seat Future Market Trends

Traffic growth on high load factor RJ50 routes

Capacity increase on RJ50 routes at peak hours

Mainline service level on regional routes

LO

W C

OS

TN

ET

WO

RK

RE

GIO

NA

L

Right-sizing of low load factor narrow-body flights

Replacement of old and inefficient jets

Expansion into medium density markets

Page 51: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Embraer´s main actions towards a cleaner environment

• Embraer was the first aircraft manufacturer to obtain ISO 14001 certification in March 2002.

• Embraer is the first aircraft manufacturer to produce a 100% biofuel powered aircraft (Ipanema).

• Embraer is improving efficiency of its current aircraft portfolio and investing in the development and implementation of new technologies.

• Replacement of old jets can produce emissions reduction of up to 50% in the short term.

• Embraer is putting big efforts in cleaning its production processes.

• Embraer is fully committed to develop new products that will help the aviation industry to reduce its environmental impact.

Page 52: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

NEW Market Forecast (2008-2027)NEW Market Forecast (2008-2027)

Page 53: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

0% 1% 2% 3% 4% 5% 6% 7% 8%

World

North America

Europe

Asia Pacific

CIS

Africa

Latin America

Middle East

China

Average Annual Growth (%)

RPK

GDP

Projected Traffic and Economic Growth

Growth by Region (2008-2027)

Projected world GDP growth around 3% in the next twenty years

sustaining nearly 5% annual increase in air transport demand

Source: Global Insight and Embraer (Oct/06)

Page 54: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Jet Deliveries by Capacity Segment

4,3004,300

1,9501,950

1,5251,525

825825

2018 2018 -- 20272027

7,4507,450

3,7503,750

2,6002,600

1,1001,100

2008 2008 -- 20272027

3,1503,150TOTALTOTAL

1,8001,80091 91 -- 120120

1,0751,07561 61 -- 9090

27527530 30 -- 6060

2008 2008 -- 20172017SegmentSegment

Embraer Market Forecast (2008-2027)

30-60: Mature market, low 50-seat demand in the short/mid term.

61-90: 75-seater as a natural growth of RJ50s.

91-120: Right-sizing of narrowbody operations, replacement of old &

inefficient jets and airline expansion into mid-density markets.

Page 55: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Projected Deliveries (30-120 seats): 7,450 Jets

NorthAmerica

3,33045%

Europe

1,35018% China

73010%

LatinAmerica

5808%

Africa

2203% Asia

Pacific

5407%

MiddleEast

1902%

CIS

5107%

Embraer Market Forecast (2008-2027)

Page 56: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

Market Share - World (30-120 seats)

59

52

47

21

45424244

38

34

24

11

5

47474545

52

44

4850505150

44

51

44

233

3

3738

23

14

84 4 4

2345

88

23

2 121 10

10

20

30

40

50

60

70

80

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Oct/07

(%)

Embraer: ERJ 145/140/135 ; Embraer 170/175/190/195

Bombardier: CRJ100/200/440/700/900/1000

Airbus: A318

Boeing: B737-600

AVIC I: ARJ-21

Sukhoi: Superjet 100

Antonov: An-148

Page 57: 2007* Airline Marketing Embraer Day 2007

T h e i n f o r m a t i o n c o n t a i n e d h e r e i n i s p r o p e r t y o f E m b r a e r a n d s h a l l n o t b e c o p i e d o r u s e d w i t h o u t E m b r a e r ´ s w r i t t e n c o n s e n t

E-Jets Around the WorldE-Jets Around the World

Thank youThank you