Embraer had a difficult decision to make last year. The Brazilian manufacturer’s E-Jet program was nearing a decade in service, having first flown in 2004. While the program had been widely regarded as a major success, Embraer knew that newly available commercial aircraft engines were offering leaps in fuel efficiency and rival aircraft manufacturers were rolling out new or re-engined aircraft.

The Bombardier CSeries, the Mitsubishi Aircraft Corp. MRJ, the Airbus A320neo and the Boeing 737 MAX would all be flying by the end of the decade. Could Embraer stand pat? Should it build an all-new aircraft? Should it really try to compete with Boeing and Airbus as Bombardier was doing with the CSeries? Would it be enough to merely re-engine the existing E-Jets?

By June 2013, Embraer made its choice. It would not incur the myriad risks of developing and building an all-new aircraft, nor would it become a primary competitor to Boeing and Airbus in the narrowbody market. But it would do more than just a re-engining.

At the 2013 Paris Air Show, Embraer banked its commercial future on the E-Jet E2, a next-generation regional jet that might be best understood as a “re-engining-plus.” With a new engine, a new wing, a redesigned interior and upgraded avionics—yet holding on to much of what has made the original E-Jet an enormous seller—Embraer was ready to take on the world with the E2.

The decision

“We had a look at the E-Jet as a program and we concluded that the E-Jet is a relatively new program, it’s still a state-of-the art aircraft,” Embraer Commercial Aviation president and CEO Paulo Cesar Silva told ATW, explaining how the company made the E2 call.  “So we said, ‘Why change the E-Jet now?’ Then the conclusion was that, given the new engines [providing] a lot of fuel savings, there was a need to reposition the E-Jet.”

Current generation E-Jets are powered by GE Aviation CF34 engines. In a blow to GE, Embraer decided to switch to Pratt & Whitney to affix its geared turbofan (GTF) engines to the E2. This would give the E2 a big boost in fuel efficiency and matched moves by regional manufacturing rivals: Bombardier is using the GTF on the CSeries and Mitsubishi is using it on the MRJ. But the new engine wouldn’t be enough to convince the market on the E2, Embraer determined.

“The decision was to change the wing as well given the larger fan of the GTF,” Silva said. The new wing represents a $700 million investment by Embraer. “So we’ll take the opportunity then to optimize the wing to the new engine,” Silva explained. “Therefore we can get, on a relative basis, more efficiencies than if we changed the engines only.”

Overall, Embraer will spend $1.7 billion developing three E-Jet variants. The E-175-E2, to seat between 80 and 90 passengers, will be 16% more fuel efficient than the current E-175. The E-190-E2, to seat 97-114 passengers, will also burn 16% less fuel than its current counterpart. The E-195-E2, to seat 118-144 passengers, is targeted to be 23% more fuel efficient than the current E-195.

The first E2 to enter service will be the E-190-E2 in 2018. First flight is targeted for the second half of 2016. The E-195-E2 is scheduled to enter service in 2019 and the E-175-E2 in 2020.

“The 175-E2 will compete with the MRJ assuming the MRJ will be available in the future,” Silva said. “The 190/195 will compete with the larger aircraft that will be available at that time, including the A319, 737-700, the CS100 … Important to mention that the 195-E2 will grow in size. We are adding three more rows [compared to the current generation E-195], 12 more seats, and these will bring more efficiencies on a seat-mile cost basis.”

During a pre-Farnborough Airshow briefing, Silva added, “We are not claiming to compete directly with the larger aircraft. We are in a different segment. Our max capacity here is 144 seats in a single-class layout. Our goal here is to compliment the narrowbodies and give airlines an opportunity to be more efficient and right-size their route systems.”

Cockpit commonality

While Embraer is promoting the step changes it believes the E2 will offer, it is also touting commonality with current generation E-Jets. After all, over 1,000 E-Jets are in service with 65 carriers in 45 countries, attesting to its flexibility and popularity with airlines.

Embraer Commercial Aircraft CCO John Slattery told ATW that cockpit commonality with current E-Jets is proving to be attractive to existing E-Jet operators. “For the airlines that are operating the current generation of E-Jets, those pilots will require less than three days training to go from the E1 to the E2 and that training will not need to involve any simulator time,” he explained. “I’m convinced that’s what will be a key part of the success of the E2. Obviously, this keeps the cost down for the airlines.”

He said cockpit commonality will enable airlines to operate a mix of current E-Jets and E2s simultaneously: “My vision is that in the morning a pilot will take off flying an E-175-E1 and in the afternoon he’ll have another segment where he operates an E-175-E2. That’s absolutely the expectation, and as we talk to airline customers that’s their expectation too. This year and next year, I’m confident you’ll see airlines ordering both the E1 and E2 together.”

Slattery added, “The 175-E2 will be super competitive against the current technology of turboprops. The 195-E2 I believe will bring a whole new list of operators into the E-Jets. And the 190-E2, which is exactly the same size as the existing E-190 but flies an additional 40 nautical miles, will also prove a winner with the existing 190 operators.”

Sales of the E2 have been brisk since the program was launched at Le Bourget in 2013 with a firm order from Utah-based regional airline giant SkyWest Inc. for 100 E-175-E2 aircraft. E2 deals announced in July at the Farnborough Airshow included a letter of intent  with Azul Brazilian Airlines for up to 50 E-195-E2s including 30 expected to be firmed soon; an agreement with China’s Tianjin Airlines for 20 E2 E-Jets; and an accord with US regional operator Trans States Holdings for 50 firm E-175-E2s plus 50 options.

E-Jet E2 firm orders are fast approaching the 300 mark less than 14 months after the program was launched. “Relative to our sales on the original E1 program, [E2 sales are] rather exceptional,” Slattery said. “Relative to the performance of some of our competitors, it’s also quite exceptional.”

Bombardier and Mitsubishi have struggled with CSeries and MRJ sales, respectively, perhaps a nod to airlines’ comfort with the current generation E-Jet and their unsurety about an all-new aircraft. “The trajectory of sales [heading into 2018 E-190-E2 entry-into-service] will be steeper than Embraer experienced on the [original E-Jet program that entered service in 2004] and a big part of that is because we’re enjoying the benefits of incumbency,” Slattery said.

Seeking diversity

But the E2 is also sparking interest from new customers. Embraer is particularly excited about winning a firm order earlier this year valued at $2.94 billion from Indian start-up Air Costa for 25 E-190-E2s and 25 E-195-E2s. Air Costa also holds 50 E-Jet E2 options. “Getting into India with the E2 was a significant breakthrough for Embraer,” Slattery said.

“India is not an easy market,” Silva said. “Everyone struggles to develop a market in India. Of course, India has all the ingredients to be a great market for [commercial] aircraft given the size of the country and the economics of the country …  We believe the 100-seat jet in India has all the elements to become a big success in that market. We are betting on Air Costa and will support them and give them every opportunity to develop their business plan, which is developing the secondary cities throughout India.”

The Tianjin commitment marks the E2’s entrance into the Chinese market. Silva said, “We are really penetrating in the most important regions. There is, however, one region where we have not had as big a presence as we’d like. It is Asia … we are putting more focus on Asia now. We want to have more operators, more airlines in that region.”

In comments made well in advance of the Tianjin and Azul deals, Slattery said, “I would be surprised if we don’t have some success in China this year. I would be surprised if you don’t see us with some success in Latin America this year.”

Producing success

Airlines ordering the E2 will get aircraft with a revamped cabin from the current generation E-Jet. E2s will have two seats on each side of the aisle in economy class, as do current E-Jets, but the E2 overhead bins will be about 40% larger. This will allow “every passenger to take one typical airline carry-on bag on board,” according to Embraer, which added that each economy passenger will have “individual control panels for lights and air-conditioning … with more ergonomic and intuitive controls that were inspired by the automotive industry.” The windows have also been redesigned with the intention of allowing in more natural light.

At Farnborough, Embraer unveiled a first/business-class concept of staggered seats similar to that seen in premium sections on some international Boeing and Airbus aircraft. “The E2 cabin will have options for Wi-Fi Internet connectivity and individual screens for inflight entertainment, among other amenities,” Embraer said.

Silva said he is not worried about a production bridge between the current E-Jets and the E2, anticipating about a two-year period in which both are produced. He expects “a second wave” for current generation E-175 sales in the US in the next several years, driven by replacement demand, which “will be an important element of the bridge.” Embraer plans to continue building the current versions of E-Jets through at least 2019, he said.

Slattery contended the program is likely to stay on track because Embraer can fall back on past experience. “One of the things we take comfort from on the E2 is we have the same project management team that effectively oversaw the development and entry-into-service of the original ERJ and as well as the [current generation] E-Jets,” he said. “That supported by the platform being an evolution of the E1 platform gives us absolute confidence in the entry-into-service dates we have already signaled to the market.”