Embraer Boosts Services On Pooling Popularity

Credit: Embraer

Embraer’s services and support revenue climbed 22% in the fourth quarter, reaching $309 million—15% of the company’s total revenue.

For the full year, services sales were up 7% at just over $1 billion, and at 19% accounted for the same share of total sales as in the previous year.

Notable recent maintenance contracts for the OEM include: an expanded pool agreement with Helvetic Airways’ Embraer 190 fleet and a renewed support contract with France’s Pan Européenne Air Service.

Embraer also announced that all its Asia-Pacific airline customers outside China have now signed up to its pool program. These include six airlines operating 60 E-Jets.

Overall, the company said that its services and support backlog—which includes business jet support—totaled $2.2 billion at the end of 2019. However, Embraer did highlight a new pool deal with UK carrier Flybe, which has presumably been cancelled due to that airline’s collapse.

Meanwhile, the company’s commercial aircraft backlog grew from $16.2 billion to $16.8 billion through the final quarter, helped by a firm order from KLM Cityhopper for 21 E195-E2 aircraft.

In normal circumstances that might have been encouraging to Boeing, which is finalizing a majority takeover of Embraer’s commercial aircraft business; however, despite the very late stage of the process, there must be serious doubts about the deal given that Boeing is now fighting extensive fires on other fronts.

Beyond noting that its small annual operating loss would have been a profit without $128 million of separation costs in 2019, Embraer did not comment on the Boeing deal in its result.

However, it did suspend its previous profit guidance, noting that while the novel coronavirus crisis had not yet hurt demand or its supply chain, an extended period of control measures could prove very harmful.

“While Embraer has weathered economic and geopolitical crises in the past, and the Company’s management and all of its employees remain committed to achieving its long-term targets, we cannot at this point assure you to what extent this virus and measures to attempt to contain it will affect us.” 

Alex Derber

Alex Derber, a UK-based aviation journalist, is editor of the Engine Yearbook and a contributor to Aviation Week and Inside MRO.