) has entered into a contract with Austral Lineas Aereas for the
delivery of two EMBRAER 190 jets. Austral Lineas Aereas, commonly
known as Austral, is a subsidiary of Aerolineas Argentina Group.
The new E190s are the Advanced Range version with 96 seats in a
two-class layout featuring a modern onboard entertainment system
equipped with individual monitors. The E-190 is a stretched
version of E-170/175 models. It features a new, larger wing,
larger horizontal stabilizer, landing gear structures and a new
engine. The GE CF34-10E engines used in E190 have been developed
by a unit of
The Embraer E-Jet family is a series of narrow-body,
medium-range, twin-engine jet airliners. Since 2004, Embraer has
delivered more than 900 E-Jets. The customers of Embraer use the
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 with lower costs and greater
Embraer S.A. primarily develops, produces and sells jet and
turboprop aircrafts for civil and defense aviation markets in
Brazil, North America, Latin America, the Asia Pacific and
Embraer is a leading manufacturer of 30-120 seat jets with a
strong global customer base. The company has sold regional and
mid-capacity jets to more than 80 customers on every continent of
the world. Its customers include some of the largest and most
significant regional and low-cost airlines and commercial
carriers the world over.
Moreover, the company has a series of contracts and tie-ups with
many other companies for its jets. Also, the continuous demand
for E-Jets demonstrates the customers' confidence in Embraer and
of satisfaction with the product.
However, the market for commercial jets is highly competitive.
The aircraft has to mainly compete with
The Boeing Company
) 717-200 and 737-500/-600, Airbus' A318, and Bombardier's
CRJ-1000 along with upcoming Bombardier CSeries models.
We also remain concerned about the heavy tax burden, rising wages
in Brazil, and potential loss of major contracts. Moreover, the
highly competitive industry in which the company operates compels
it to incur high costs along with the possibility of order
cancellations. The company presently retains a short-term Zacks
Rank #3 (Hold).
In the near term, we would advise investors to accumulate its
short-term Zacks Rank #2 (Buy) peer
Wesco Aircraft Holdings, Inc.
BOEING CO (BA): Free Stock Analysis Report
EMBRAER AIR-ADR (ERJ): Free Stock Analysis
GENL ELECTRIC (GE): Free Stock Analysis
WESCO AIRCRAFT (WAIR): Free Stock Analysis
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