Embraer Executive Jets Strike Gold In India

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Embraer Executive Jets Strike Gold In India
Aviation Daily Dec 02 , 2009 , p. 10
Neelam Mathews

Embraer has increased its marketing initiative in India, one of the fastest emerging growth markets in the Asia/Pacific region.

Its entry level jet, the Phenom 100, which it brought to Asia for the first time this month, made its foray into seven Indian cities, including two smaller ones – Indore and Madurai. “The market here is very broad-based. It includes training schools, fractional ownership, charters and business houses,” said José Eduardo Costas, Embraer’s VP-marketing and sales, Asia/Pacific, executive jets.

Embraer said it has decided to be a strong player in the Asia/Pacific market with its spectrum of aircraft that will enable customers to move up brand levels. “The beauty of our aircraft is it can hover around India,” added Costas.

Two Pratt & Whitney Canada PW617F-E engines power the jet, with 1,695 lbs. of thrust each. Its range with four occupants is 1,178 nautical miles. The aircraft is capable of flying at 41,000 feet, attained by a direct climb, even when fully loaded.

Costas added that economic growth, corporate profits and stock market performance are indicators of how demand for business jets behaves. “Here in India, the outlook is promising.”

While Costas is not overly optimistic about the market and hopes it will bounce slowly back in mid-2010, he said recovery in the next two years will not be the same as forecast earlier. “Besides, lack of understanding about the benefits business jets bring to the country has held up growth of infrastructure,” he said. Once infrastructure is up, it will give rise to qualified jobs, maintenance, handling, FBOs and events, he added.

Embraer has 30 firm orders for Phenom 100s and 300s from India. Aviators India recently ordered two Phenom 100 jets, and Invision Projects, which plans to use some aircraft as air taxis, had the largest order — 18 Phenom 100s. The deliveries are to start in the third quarter of 2010, and conclude by 2011.

Asia has about 700-800 business jets, or 12% of the world’s share. As deliveries grow by 9% per year in the next 10 years, Costas said he expects the number to double.

India and China are engines of growth and the most promising markets. While China plans to loosen some restrictions, it currently is heavily regulated, but is looking seriously at infrastructure. India will need to look at its infrastructure needs as well, said Costas.

With expected growth in the market, Embraer recently appointed Mumbai-based Indamer Company as its authorized service center and has invested in training mechanics and engineers.

Embraer has received more than 800 orders for the Phenom 100 and 300 jets. Its new Phenom 100 very light jet was launched, along with the Phenom 300 light jet, in May 2005. The first aircraft was delivered to a U.S. customer, Burt Rutan, in December 2008. The book value of the Phenom 100 is $3.6 million.

While the OEM claims it is not in the business of financing sales, it helps its customers. At the Phenom entry level, the customer pays 15%-20% before delivery and the rest after delivery, said Costas. He added that because the cost of the aircraft is low, the capability of its customers to generate financing is related to their relationship with banks.

The company expects to deliver 21 aircraft by the end of 2009.