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Commercial Aviation Update Paulo Cesar Silva President, Commercial Aviation Nov/2011

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Page 1: Embraer day 2011_ny_com

Commercial Aviation UpdatePaulo Cesar Silva – President, Commercial Aviation

Nov/2011

Page 2: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

This presentation includes forward-looking statements or statements about events or

circumstances which have not occurred. We have based these forward-looking

statements largely on our current expectations and projections about future events and

financial trends affecting our business and our future financial performance. These

forward-looking statements are subject to risks, uncertainties and assumptions, including,

among other things: general economic, political and business conditions, both in Brazil

and in our market.

The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,”

“expects” and similar words are intended to identify forward-looking statements. We

undertake no obligations to update publicly or revise any forward-looking statements

because of new information, future events or other factors. In light of these risks and

uncertainties, the forward-looking events and circumstances discussed in this

presentation might not occur. Our actual results could differ substantially from those

anticipated in our forward-looking statements.

Forward Looking Statement

Page 3: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Contents

Strategic Objectives

E-Jets Family

Market Outlook 2011-2030

Product Development

Page 4: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

• $250 million EBIT

from Services and

Support in 2025

Strategic Objectives:

• Leadership in the

Commercial Aviation

up 120 seats

Products that satisfy market

needs (reliable, efficient,

comfort, performance and

economics)

Page 5: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Individual Entertainment Systems

Page 6: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Long Haul Flying & Dual Class

Page 7: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Right-Sizing for Profitability

06:00

08:00

10:00

12:00

14:00

16:00

18:00

20:00

Jun/11Dec/08

Seats 2,064 1,140

E175

E175

E175

E175

E175

E175

E175

E175

E175

E175

E175

E175

E175

E175

E175

MD88

MD88

MD88

MD88

MD88

MD88

MD88

MD88

MD88

MD88

MD88

MD88

MD88

MD88

E175

New York - Washington

Page 8: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

London City Airport Operation

Page 9: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Growing from Smaller Jets

Page 10: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

“The EMBRAER 190 fleet will be key in ensuring Kenya Airways

becomes the leading carrier on the continent, interlinking African cities

and, through our Nairobi hub, connecting Africa to the world,”

(Dr. Titus Naikuni, Group MD & CEO)

Building Frequency & Network

Page 11: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Introducing Low Cost Air Travel

Page 12: Embraer day 2011_ny_com

E-Jets Deploymenthelping airlines to be more efficient

Source: OAG (1Q11)

Right-sizing: 48%

Page 13: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

More than 1,000 E-Jets ordered

More than 800 delivered

Commercial Aviation(as of Sep 30th., 2011)

Firm

Orders

EMBRAER 170 188

EMBRAER 175 189

EMBRAER 190 531

EMBRAER 195 110

E-Jets 1,018

Page 14: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Market Confidence on E-Jets in 2011

Customer Firm Orders

Dniproavia 10 E190

TRIP 3 E190

Air North 1 E170

Alitalia 15 E175 + 5 E190

KLM 5 E190

CDB Leasing (China Southern) 10 E190

Air Astana 2 E190

Air Lease 10 E190

GECAS 8 E190

Kenya Airways 10 E190

Lufthansa 5 E195

Azul 11 E195

Undisclosed 1 E175

Jan-Oct/2011 96

Page 15: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Market Share - World (Jets 61-120 seats)

Considering accumulated Net Orders up to Sep/11.

Embraer: 170/175/190/195 Sukhoi: Superjet 100

Bombardier: CRJ700/900/1000; CS100 Comac: ARJ-21

Airbus: A318 Antonov: An-148/158

Boeing: B737-600 Mitsubishi: MRJ90

0%

10%

20%

30%

40%

50%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Page 16: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Products that satisfy market needs

(reliable, efficient, comfort, performance

and economics)

Diversified customer base

Strategic Objectives:

• Leadership in the

Commercial Aviation

up 120 seats

• $250 million EBIT

from Services and

Support in 2025

Page 17: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

E-Jets Customer Base (by Business Model)

Source: Embraer (Jun/2011)

32%

41%

27%

Regional Airlines

Network Airlines

(% of E-Jets Fleet+Backlog)

Low Cost Carriers

• Right-sizing

• New markets

• Right-sizing

• New Markets

• Natural Growth

• Right-sizing

E-Jets efficiency in all business models

Page 18: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

E-Jets Global Presence

E170 E175 E190 E195

Source: OAG (3Q2011)

Diversified customer base across five continents

60 airlines in 40 countries

Page 19: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Products that satisfy market needs

(reliable, efficient, comfort, performance

and economics)

Diversified customer base

Customer base expansion

through leasing companies

Strategic Objectives:

• Leadership in the

Commercial Aviation

up 120 seats

• $250 million EBIT

from Services and

Support in 2025

Page 20: Embraer day 2011_ny_com

around

245 customers

worldwide

Page 21: Embraer day 2011_ny_com

United States

Hawaiian Airlines

Southwest Airlines

Spirit Airlines

United Continental- Holdings

Canada

Air Canada

Sunwing Airlines

WestJet

Mexico

AeroMexico

interjet

volaris

Trinidad & Tobago

Caribbean Airlines

Brazil

Gol Airlines

TAM Airlines

Trip Linhas Aereas

Colombia

Avianca

France

Air Austral

Air France

Turkey

SunExpress

Germany

airberlin

XL Airways - Germany

Ireland

Aer Lingus

Norway

Norwegian Air - Shuttle

ASA

Spain

Air Europa

vueling

The Netherlands

KLM

transavia.com

Italy

Alitalia

Bulgaria

Bulgaria Air

Czech Republic

Travel Service, A. S.

United Kingdom

Thomas Cook

Russia

S7 Airlines

South Africa

South African - Airways

Kenya

Kenya Airways

Ethiopia

Ethiopian Airlines

United Arab Emirates

Air Arabia

Etihad

China

Air China

Air Macau

China Eastern- Airlines

China Southern

Hainan Airlines

Shanghai Airlines

Sichuan Airlines

Spring Airlines

Xiamen Airlines

India

GoAir

Kingfisher Airlines

SpiceJet

Indonesia

Garuda Indonesia

Japan

Skymark Airlines

Kazakhstan

Air Astana

Sri Lanka

Mihin Lanka

SriLankan Airlines

Malaysia

AirAsia

Vietnam

Vietnam Airlines

Korea

Asiana Airlines

Korean Air

Mongolia

MIAT Mongolian Airlines

Thailand

Orient Thai Airlines

Australia

Virgin Australia

New Zealand

Air New Zealand

Air Lease Customer Base:

around

60 customers

worldwide

Page 22: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

E-Jets supported by Leasing Companies

Source: Embraer, as of September 2011

Page 23: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

0 Leased

28 Leased

(24%)

141 Leased

(29%)

170 Leased

(28%)

233 Leased

(29%)

70 Leased

(33%)

107 Leased

(32%)

189 Leased

(27%)

Backlog as of July 2011Source: ACAS, Embraer’s Sales Financing

E-Jets Operating Lease Fleet Evolution

Page 24: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

Products that satisfy market needs

(reliable, efficient, comfort, performance

and economics)

Diversified customer base

Customer base expansion through

leasing companies

Excellence in Customer

Experience (ECE)

Strategic Objectives:

• Leadership in the

Commercial Aviation

up 120 seats

• $250 million EBIT

from Services and

Support in 2025

Page 25: Embraer day 2011_ny_com

THIS INFORMATION IS EMBRAER PROPERTY AND CANNOT BE USED OR REPRODUCED WITHOUT WRITTEN AUTHORIZATION

Services Portfolio Enhancement: e-Solutions

Flight Ops, Technical &

Maintenance:

Up-to-date information

anywhere

• maintenance & operations

technical publications

Material:

Streamline your purchasing

process

• e-commerce, e-pool, order

tracking and B2B

integration

Manage your E-Jets fleet

health

• health monitoring system

and troubleshooting

Page 26: Embraer day 2011_ny_com

THIS INFORMATION IS EMBRAER PROPERTY AND CANNOT BE USED OR REPRODUCED WITHOUT WRITTEN AUTHORIZATION

Global Presence: MRO Network

25 Service Centers

28 in 2012

Updated: November 2011

Page 27: Embraer day 2011_ny_com

THIS INFORMATION IS EMBRAER PROPERTY AND CANNOT BE USED OR REPRODUCED WITHOUT WRITTEN AUTHORIZATION

ECE Project: Customer Care Center

Illustrative pictures

•Will provide 24/7, fast, integrated

and comprehensive solutions

with clear and accessible status

information for customers,

covering Technical (AOG,

Routine, Tech Pubs and MRB)

and Logistics (Parts and

Shipment)

•Single point of contact for all

technical and material inquires

• And, on-demand on-site support

and aircraft recovery services

(Go/Rescue Team)

Page 28: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

www.embraercommercialjets.com/marketoutlook

Page 29: Embraer day 2011_ny_com

global overview

Trends andanalysis

Market Outlook 2011-2030

Environmental Pressure Emissions and noise restrictions getting tougher

Development of new technologies (retirement of older jets)

Use of alternative fuels, lower fuel consumption and emissions

Business EfficiencyMore consolidations & mergers and fewer start-ups

Capacity management and cost reduction

Match aircraft capacity to market demand (right-sizing)

Increased Disposable IncomeMiddle class expansion

New markets opportunities for smaller jets

Increased CompetitionMore air services liberalization (Asia and East Europe)

LCC’s expansion (mostly in Asia)

Weak revenue environment

Growth of Emerging Markets Balance of global economic power shifting to East and South

Medium and small cities driving economic growth

Long term air transport demand growth

Global Trends

Page 30: Embraer day 2011_ny_com

The information contained herein is property of Embraer and shall not be copied or used without Embraer s written consent

5.2% annual world RPK growth

7.5% China

7.2% Latin America

6.9% Middle East

6.1% Asia Pacific

5.9% CIS

5.4% Africa

4.4% Europe

3.5% North America

Market Outlook 2011-2030

Page 31: Embraer day 2011_ny_com

market forecast

By thenumbers

Market Outlook 2011-2030

Projected Deliveries by Segment

31,435 new aircraft deliveries total market value of US$ 3 tri*

7,225 aircraft

(23%)

* At list price

Page 32: Embraer day 2011_ny_com

60 Airlines. 40 Countries

Embraer E-Jets