Embraer celebrated its 1,600th E-Jet in July when it delivered an E190-E2 to Swiss regional carrier Helvetic Airways. Satu Dahl speaks with Embraer Commercial Aviation’s new president and CEO Arjan Meijer about his vision and priorities going forward
July’s 1,600th E-Jet delivery was a very special moment for Embraer. The aircraft manufacturer says its global E-Jet fleet has now accumulated more than 30 million flight hours, with some 80 airlines currently flying Embraer E-Jets and the programme counting low-cost, regional and mainline carriers all as customers.
To navigate these challenging times for aviation, Embraer has been restructuring its operations and reintegrating its commercial aviation business. The company appointed industry stalwart Arjan Meijer as the new president and CEO of Embraer Commercial Aviation in June. Meijer joined Embraer in April 2016 as vice president of commercial aviation for Europe, the Middle East, Africa, and Russia, moving on to the role of chief commercial officer of Embraer Commercial Aviation in January 2017. In his role as CCO, Meijer helped the company to achieve 35 airline deals.
Talking exclusively to Low-Cost & Regional Airline Business, Meijer says he has found his first month as president and CEO of Embraer’s commercial aviation very busy but also energising. “Obviously our industry faces a number of serious issues right now”, Meijer states. “Globally people are concerned for their businesses, livelihoods, and health; and this is everyone, including our customers, suppliers and colleagues.
“From wherever you stand, now is certainly an exciting time to be leading an aircraft OEM, and I’m very proud of Embraer’s humility and customer focus in response to these unprecedented times. My colleagues’ reaction to the crisis, and their determination to succeed has been incredible. While the turbulence we see in the market will be with us for some time, there are plenty of opportunities and reasons for optimism for those that are innovative and resilient. At Embraer we say, “We live for the challenge”, and it’s in our DNA to evolve and innovate and I’m confident we will emerge strongly. I’m already seeing some great opportunities ahead.”
Regarding the main opportunities for Embraer’s E-Jets in the current market, Meijer says that, in commercial aviation, the company’s business remains strong. “We are number one in the market under 150 seats, and our family of aircraft is the newest and most efficient on the market. In fact, our newest aircraft the E195-E2 offers a paradigm shift in economics to our customers never available before, a seat cost similar to a larger narrowbody, but with trip costs of regional aircraft. As we emerge from this crisis, I see Embraer being very much part of the recovery solution. So, for Embraer at least, there is good reason for optimism.”
In past industry shocks, lower capacity aircraft have often led the recovery, helping airlines to manage their cash flow and restore connectivity according to Meijer. “This pattern is more strongly reflected now due to the nature of this particular crisis. It is no surprise that airlines are focusing on domestic and regional networks where restrictions are fewer and demand is more resilient. In fact, we’ve seen our customers in Europe, the US, China, Nigeria, and South Africa prioritise restarting operations on short-haul routes with their E-Jet fleets. Carriers are gradually restoring their networks, with some reporting they will operate 80 per cent of their routes in July. Embraer E-Jets and ERJs are proving instrumental in helping many airlines carefully add capacity and frequencies as demand recovers.”
Lower capacity aircraft like Embraer E-Jets are ideal in providing flexibility in a weak-demand environment. Fewer seats, improved yields and lower trip costs produce better bottom-line results compared to larger jets, Meijer explains. Moreover, E-Jets allow carriers to restore service to more cities faster and develop connectivity to flow passengers across their networks.
“A further outcome of the downturn is the accelerated retirement of older aircraft. Airlines are permanently parking both narrowbodies and widebodies, even eliminating entire fleet types in favour of lower gauge, more efficient aircraft”, Meijer says. “And regular business also continues; in July we delivered our 1,600th E-Jet to an airline in Switzerland. Last week, we also welcomed our newest E-jet operator to the family: Vietnam-based Bamboo Airlines.”
So, what does Meijer think the long-term impact of Covid-19 will be on the regional aircraft market? “In one important way, the Covid-19 crisis is comparable to the challenge the industry faces on emissions and other environmental concerns. Our desire to connect, travel, engage, experience and trade has not suddenly vanished overnight. Fundamentally, humans are sociable creatures – in the case of the environment, we need to find solutions that deliver sustainable travel; in the time of coronavirus, passengers need to feel it is safe to fly. Demand will return, it already is, but it will take time, and the pandemic is still far from over.”
Meijer states it is already clear that demand is returning more rapidly in the short-haul/regional segment, and that the long-haul recovery will be some way behind. “I expect to see regional routes developed on underserved tier two and three cities, as well as more direct city pairs as travellers’ priorities change, and that this will provide a basis on which to grow more robust regional networks in the long term as demand, and even growth, returns. For carriers needing to feed their hubs in the new normal, the E-jet and E2 families offer unrivaled flexibility to optimise one’s feed to maximise returns.
Meijer says we also need to ensure we do not forget, in this health crisis, our responsibility to the global environmental challenge. “Eliminating excess capacity and introducing smaller new technology aircraft is not only essential to adjust to weaker passenger demand but also favourable for environmental reasons. Airlines that retain or introduce more efficient, greener aircraft, like our E2s, will be better positioned to comply with future noise and emission standards. In the long-term, which is a view airlines tend to take for new aircraft investments, the environment challenge will become an even more important factor than it was before the Covid-19 crisis.
“Predicting the future is fraught with difficulty, it is all about how airlines adapt in terms of network and fleet. Covid-19 clearly shows, as we have seen with other crises in the past, that airlines with versatile and efficient fleets, including aircraft in the 70- to 150-seat segment, benefit from the inbuilt flexibility to protect their business in the downturns and seize profitable new opportunities in the upturns.”