Brazilian brand aims to 'rightsize' Middle Eastern market
Big is not always necessarily best when it comes to opening up new routes. Jill Stockbridge looks at Embraer and its plan to prove this to the region's airlines.
Following its success with single-aisle jets in Europe and the United States, Brazilian aircraft manufacturer Embraer is eyeing the Middle East as the next big market for the E-Jet series E170, E175, E190 and E195.
The E-Jets are not new, having been in production for seven to eight years, but the company believes they are the perfect answer for regional travel and that the market is ripe to receive them.
Currently the company boasts 63 E-Jets within nine operators in six Middle Eastern countries. And for the sixth consecutive year, the E-Jet family is the second most-operated aircraft fleet in the Middle East, servicing 90 markets from eight major hubs in the region. The team boasts that an E-Jet is taking off once every six minutes in the Middle East.
Mathieu Duquesnoy, vice president, airline marketing Middle East and Africa, is proud of the company’s achievements. “This is tremendous considering the first E-Jet in the region only entered service with Saudi Arabian Airlines in 2005. While the A320 is still the firm favourite in the region, we have seen E-Jets go from 0 to 18% of the market share in seven years.”
Duquesnoy has found that the concept of ‘less is more’ has been a harder sell in the region than in Europe, as the major airlines show a preference for wide-bodied aircraft, even on shorter sectors. “There was no need to sell the concept in Europe but here, where sometimes money is no object, there is the feeling that bigger is better and we have to explain the advantages of the smaller aircraft.
“However, the market dynamics are ripe for rightsizing. We believe that, as balance sheets and economics become more of a driving force, many of the regional airlines will rightsize their aircraft. The market is open to this and we have the right product. Our aircraft have been praised as the most comfortable and they are well accepted,” he said.
They are certainly making an impact in the region. Following Saudi Arabian’s lead, Royal Jordanian bought E175s and E195s and was the first to fly them internationally, from Amman to Muscat. Egyptair Express now runs 12 E170s, nasair has 15 E190 and E195s with Gulf Air purchasing two 170s and two 190s, and Oman Air joining the customer base with two E-175s operational and two on backlog.
Duquesnoy believes that the downturn and the political instability in the region have helped to demonstrate the flexibility of having the smaller aircraft in a fleet. While airlines with single aircraft or just wide-body fleets could only reduce capacity by reducing frequencies, E-Jet operators were able to use the smaller aircraft to match capacity to demand.
Royal Jordanian, for example, reduced capacity to Cairo, Damascus and Tunis during the earlier unrest, without dropping a single frequency, by replacing the A320 aircraft with E-Jets on the affected routes.
Gulf Air had also purchased four E-Jets as part of a strategy to increase frequencies on key regional routes, but the political unrest in Bahrain caused it to redeploy the smaller aircraft to reduce capacity by 25% on both the Abu Dhabi and Muscat routes, without reducing frequency.
Embraer forecasts strong growth in the region, benefitting from a regional air transport boom and the creation of mega hubs fed by regional carriers. “We project the need for 2,135 new aircraft by 2031,” said Duquesnoy. “Approximately 935 of these will be wide-bodied jets, around 840 narrow-bodied and around 55 turbo props, but we expect 15% of that demand to be for smaller jets, with between 30-120 seats. That is around 305 aircraft required over the next 20 years and as the strong leaders of the sector, with 75% market share, we expect to be supplying that need.”
Despite Duquesnoy’s optimism, there may be stumbling blocks to the much-flouted rightsizing that have nothing to do with cultural attitudes to wide-bodied jets. A representative of flydubai commented that the airline could not reduce the size of its aircraft, as it was unable to secure the additional slots to make up the seat numbers by higher frequencies.
Duquesnoy admits that liberalisation of regional markets would help. “There is a lot of regulation in place, particularly in Saudi and India, and the airlines are not able to fly as they want to. A little deregulation would help the sector to boom. However, we see the future of the E-Jets as being in the MENA regional and have invested in the region to develop that potential.”
To support this growth the company has boosted its presence in the region with an E-Jets authorised service centre in Cairo, full flight simulators in Bahrain, Jeddah and Amman, an increased sales, marketing and technical staff in Dubai, and a recently opened spare part distribution centre in Dubai, in partnership with Swiss-headquartered Kuehne and Nagel, the global logistics giant.
The new centre, based in Dubai Logistics City, a stone’s throw from the new Al Maktoum International Airport, Dubai World Central, has a 16,000sqm footprint with a dedicated area for Embraer’s needs and has guaranteed to dispatch parts for an aircraft on the ground (AOG) within 24 hours.
Embraer also held Asia and Middle East operators’ conferences in Bangalore, India, and Abu Dhabi in October, with the Middle East conference focusing on the ultra-large Lineage 1,000, the large Legacy 650 and super midsize Legacy 600.
The conferences covered the latest technical, maintenance and flight operations, while giving customers the chance to give feedback to the company through workshops and panel sessions.
Duquesnoy concluded: “Our investment in the region clearly demonstrates our commitment to the Middle East and will enhance the support already available.”