Brazilian aircraft maker
) foresees a $70 billion growth opportunity over the next two
decades in Asia-Pacific including China. The region is poised to
take delivery of 1,500 new jets in the 70-130 seat segment over
the said period. This will comprise almost 20% of the global
demand in this segment. The Asia-Pacific region is believed to be
the latest hunting ground for commercial aircraft manufacturers
as encouraging demographic factors are driving unprecedented
growth in the regional airline industry.
Embraer with an 80% plus stake in the 70-130 seat Asia Pacific
market estimates that 65% of the projected new deliveries will
aid in market growth while 35% will replace an ageing fleet.
Since 2004 the company has delivered almost 150 E-Jets to 10
operators from 6 countries in the region.
Intra-regional liberalization supported by economic growth is
expected to drive air transport demand by 6% annually by 2032.
Embraer expects the Asia-Pacific region to gradually become the
world's largest market for aircraft makers. This expansion is
expected to come mostly from China and India where an emerging
urban middle class is increasingly taking to air travel.
In a separate release, the company announced that it had signed a
deal with U.S.-based Hawker Pacific Aerospace Inc. for
maintenance and support services for its Legacy 500 and Legacy
450 executive jets in the Asia-Pacific region.
The Embraer E-Jet family is a series of narrow-body,
medium-range, twin-engine jet airliners. Since 2004, Embraer
holds a global market share of 51% of orders and 62% of
deliveries in the 70 to 130-seat segment.
Embraer customers use these E-jets either as network carriers, as
charter operators or as low cost and regional airlines. E-jets
help the airlines in balancing demand with capacity, in
substituting old and inefficient aircraft, and developing new
markets at lower costs and greater efficiency.
Embraer is the world's third largest commercial aircraft
manufacturer on the heels of
The Boeing Co.
) and Europe's Airbus. Embraer's latest announcement came after
Boeing revealed that Asia-Pacific will require 12,820 airplanes
worth $1.9 trillion in the next two decades. The deliveries will
account for a sizeable 36% of the global commercial airplane
delivery in the aforesaid period. These deliveries will triple
the size of the Asia-Pacific aircraft fleet by 2032 from 2012
In 2013, Embraer delivered 209 commercial and business jets and
had a firm order backlog of $18.2 billion at year end.
Embraer carries a Zacks Rank #2 (Buy). However, other
better-ranked stocks in the space include
Lockheed Martin Corp.
Northrop Grumman Corp.
), both with a Zacks Ranks #1 (Strong Buy).
BOEING CO (BA): Free Stock Analysis Report
EMBRAER AIR-ADR (ERJ): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
NORTHROP GRUMMN (NOC): Free Stock Analysis
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