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Demand for E2 jets strong as plane shortage hit carriers, Embraer says



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By Gabriel Araujo

SAO JOSE DOS CAMPOS, Brazil, June 19 (Reuters) -Brazilian planemaker Embraer EMBR3.SA has been experiencing strong demand for its "small narrowbody" aircraft as carriers face a shortage of larger single-aisle planes in the market, an executive said on Wednesday.

"We see more and more customers looking at the E2 to complement their larger narrowbodies," Embraer's Vice President of Marketing for Commercial Aviation Rodrigo Silva e Souza told reporters at the firm's headquarters.

"We never saw such a strong demand for this size of aircraft as we are seeing today," he added, noting airlines have been using Embraer's E2 regional jets either to increase flight frequencies or expand their networks.

Air travel demand has been strong but extended delivery deadlines from Embraer's larger peers Boeing BA.N and Airbus AIR.PA have limited carriers' ability to add capacity, giving Embraer's smaller aircraft a push.

The Brazilian firm's traditional niche fits just below the Boeing and Airbus's best-selling 150-seat-plus market. Embraer, however, has production slots available from 2026, while Airbus for example is sold out until the end of the decade.

Embraer delivered 64 commercial jets last year, just below its target of 65 to 70, and is confident it will meet this year's outlook of 72 to 80, the firm'schief executive told Reuters earlier this week.

Embraer is looking to produce around 80 to 90 commercial aircraft in 2025 and return to the level of 100 jets a year by 2026 at the latest.

Silva e Souza noted that the company has been delivering fewer planes than it would like to at the moment due to engine supply restrictions, but still managing to grow its output and meet forecasts.

"Nowadays there is a high demand for (engine) spares in the market, but having said that, we are growing this platform faster than other competitors," the executive said. "It's less than what we would like, but still growing significantly."

The E2 family uses Pratt & Whitney's RTX.N GTF engines, which in recent years have faced repair bottlenecks due to unexpected inspections related to a powdered metal problem and delayed deliveries.

Silva e Souza stressed that Embraer has not been immune to the GTF issues but faced less problems than competitors as its aircraft is lighter, adding he expects issues to start to decrease next year as solutions come in place.

The executive noted that demand for Embraer's E175 has also picked up after a reduction in recent years due to pilot shortages in the United States, where the smaller, first-generation plane serves as the backbone of regional aviation.

"We see demand for the E175 back and strong."

American Airlines AAL.O placed a major order for 90 E175 planes in March.



Reporting by Gabriel Araujo
Editing by Marguerita Choy

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