Embraer Boosts Order Backlog With 20 Jet Order

January 14, 2013

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Embraer reported its first quarterly backlog growth in a year on Monday with an order of 20 regional jets from an unnamed customer.

The company, the world's largest maker of regional jets, broke a yearlong drought of big airline orders with a deal for 15 E-190 and five E-175 planes in the fourth quarter. The announcement in a securities filing raised hopes that Embraer can maintain production levels in 2013.

The company's order backlog, a pipeline of future revenue, grew to USD$12.5 billion at the end of December. Three months ago, the backlog had fallen to USD$12.4 billion, its lowest level in more than six years, raising concerns that Embraer might have to cut output this year.

Embraer has said it is counting on orders early in 2013 to fill open production slots for the end of the year.

Orders from major US carriers such as American Airlines could rebuild Embraer's backlog this year and next, Paulo Cesar de Souza e Silva, the company's head of commercial aviation, said last month.

But Bombardier won the first big contest in the race to revamp the US regional fleet, with an order in December for up to 70 CRJ900 jets from Delta Air Lines.


A fourth-quarter flood of private jet deliveries helped Embraer meet its 2012 production targets, the company reported on Monday.

The 53 executive jets Embraer delivered in the quarter outpaced its 50 deliveries a year earlier, after a tsunami in Japan had disrupted supply chains the previous spring. But deliveries of commercial jets in the last three months of 2012 fell to 23 from 32 a year earlier.

In the full year, Embraer delivered 106 commercial aircraft, one more than in 2011, and 99 executive jets, in line with the year before. In February, the company forecast deliveries of 105 to 110 jets to airlines and 90 to 105 private planes.

Smaller, less-expensive aircraft accounted for a greater number of Embraer's 2012 commercial jet deliveries than in 2011. But in the executive jet segment, the company boosted deliveries of more-profitable large jets to 22 aircraft, beating its target of 15 to 20 such planes.

Embraer added a net 42 new orders for its regional E-Jets in 2012, falling far short of its goal to book a new order for each commercial jet it delivered.

Sales also lagged those of Bombardier, which booked more than 90 regional jet orders last year. In recent years, the Canadian plane maker has delivered about half as many planes as Embraer in the 70-to-120-seat segment.

Also in the fourth quarter, Embraer's backlog benefited from a border-monitoring contract with Brazil's armed forces signed in November for more than USD$400 million. The company does not separately disclose quarterly order and delivery performance for military aircraft.