in Business Aviation

Global Data: Embraer will need state help to survive COVID-19 crisis

Posted 2 June 2020 · Add Comment

Following the recent news that Embraer is reportedly seeking US$600m in credit line to public and private financiers, Nicolas Jouan, Aerospace and Defence Analyst at GlobalData offers his view on the situation.

 

“This decision is not a surprise for a company currently struggling with the collapse of air travel and reducing demand for its main products: regional and private jets. The COVID-19 outbreak instantly froze the commercial aircraft industry earlier this year as airlines suddenly saw demand for international travel wiped out.

 

“Embraer already had to deal with the breaking of two joint ventures with Boeing, a decision taken by the American plane maker last April and currently challenged by Embraer for alleged wrongdoings. This partnership concerned commercial aircrafts among other things, and the precipitation with which Boeing decided to terminate the partnership suggests that no recovery should be expected for the regional jet industry for at least a few years. This was followed by Mitsubishi’s decision to shelve its own regional jet programme last month in light of the COVID-19 outbreak.

 

“An argument could be made in favour of regional jets in the medium term. As air travel will slowly resume after the pandemic, it is likely that social distancing measures and changing consumer behaviour will open an era favouring smaller planes and private jets, which would in turn boost Embraer. However, even more likely is the general contraction of the air travel industry, which is expected to show hundreds of billions in losses this year and will force airlines and leasing companies to slim down their fleets. In this context, Embraer should expect as much headwinds as Boeing or Airbus.”

Other Stories
Advertisement
Latest News

African airlines’ traffic dropped 68.0% in February

The International Air Transport Association (IATA) announced that passenger traffic fell in February 2021, both compared to pre-COVID levels (February 2019) and compared to the immediate month prior (January 2021).

South Africa needs to start planning for the safe restart of aviation

IATA has urged South Africa to start planning for the safe resumption of international air travel to help repair its decimated business and leisure tourism industry.

Ethiopian Marks 75th Anniversary

Ethiopian Airline Group celebrates its 75th anniversary today, April 8, 2021.

Travelport+ launches next-generation platform for a new era of travel

Global travel retail platform, Travelport, has launched its next-generation platform, Travelport+.

Baby born on EgyptAir flight coming from N'Djamena

An EgyptAir flight from N'Djamena to Cairo had to make made an emergency landing at Aswan Airport to check on the safety of a Chadian passenger and her new born baby boy, after giving birth safely on board, with the help of a medical student.

Willie Walsh to deliver interview at World Aviation Festival Virtual

Willie Walsh will be doing one of his very first interviews as the new IATA Director General at the World Aviation Festival Virtual on Tuesday, 20 April, 9:30 AM to 10:00 AM GMT.

Aviation Africa 2021 SKNN
See us at
WDS BT1202090322Aviation MENA 2021Aviation Africa 2021 BTNNDAS21_BT