Input shortages could delay Embraer plane deliveries

After a difficult first six months in 2022, Brazilian planemaker Embraer said the company’s aircraft manufacturing is suffering from lingering challenges in the global supply chain that could harm its delivery plan for the year.

CEO Francisco Gomes Neto said in recent interviews that Embraer plans to deliver 60 to 70 commercial planes and 100 to 110 executive jets this year, a growth target already considered timid by investors. 

A lack of components is holding back manufacturing, especially of the engines and electronic panels of the aircraft. Production and export of these parts continue to be limited by a global logistics crisis, exacerbated by the recent Covid lockdowns in China. 

To circumvent bottlenecks in the supply chain, Embraer placed more than 20 of its professionals within the factories of suppliers and sub-suppliers to help them with production programs. So far, the measure has ensured the receipt of the necessary components, even if late. But it has not been able to avoid delays in aircraft deliveries.

For Arjan Meijer, president of Embraer’s commercial aviation branch, even though the pandemic impacts on the sector are receding, it is still necessary to wait for the slow plane-selling process to return to an average level.

“This process takes, on average, at least a year to reach the signing of contracts. And then you have to manufacture the aircraft. So I think we are on pace, but you have to be patient,” he said.

After four consecutive years of losses, amplified by the drastic drop in commercial jet production due to the pandemic and a failed merger that would have resulted in the sale of Embraer’s commercial aviation branch to Boeing, the company nonetheless expects 2022 to be a year of net profit recovery. And between 2023 and 2026, expectations are for growth.

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