Aircraft Profile: Embraer E175

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Washington D.C., November 16, 2015 – Lindsey Webster (Mohr), Manager of Valuations, Morten Beyer & Agnew (mba), provides insight on the Embraer E175 market and value activity in the November issue of Airfinance Journal.

“While many carriers continue to upgauge aircraft, the E175 remains in a niche position because of scope clause agreements limiting seating capacity and range on regional airlines.  As a result, values and lease rates for the type have remained stable, and the outlook is positive.”

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Analysis: Boeing 777/777x Gap Unchanged Through May

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Based on Boeing’s most recent release of orders and deliveries to include May 2015, there were nine 777 aircraft delivered in May.  This continues to demonstrate Boeing’s resolve to maintain its production schedule at 8.3 aircraft per month.

A review of Boeing’s orders in May showed no new 777 or 777x aircraft orders, thus leaving a shortfall of orders between the current technology 777 aircraft and the new Boeing 777x aircraft of approximately 222, or at the existing production rate, more than 26 months.

The scenario varies dramatically from Airbus’ handling of the A330/A330neo gap.  In the case of the A330, Airbus has stepped down its production rate, commencing October 2015, to nine aircraft per month and again in February 2016, to six per month.  A quick review of the first five months of A330 deliveries by Airbus shows that the company is, this year, already moving lower on its delivery schedule with an average of seven aircraft being delivered per month, through May 2015.

Analysis: With Tianjin Airlines’ Order, Embraer Production Gap to the E2 Jet EIS is Shrinking

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With today’s order of 20 Embraer 195s, placed by Tianjin Airlines, the gap in production of the current generation aircraft moving to the new E2 aircraft is becoming de minimis. According to mba’s calculations, the gap consisted of approximately 50 aircraft, or two quarters worth of production. The Tianjin order decreases the gap to only 30 aircraft, or slightly more than three months. A slightly slower delivery schedule will negate the problem, especially since the planned 25 aircraft per quarter delivery schedule announced by Embraer is slightly above their most recent quarterly output.