This is a part of the article published by Aerospace America in November. For full version please follow the link at the bottom.
Since the ERJ 145 family began, Embraer has used derivatives of these regional jets to pursue the business jet market. Its most successful offering by far has been the Legacy, an adaptation of the ERJ 135. So far over 110 Legacies have been delivered, although many of these have been to military customers.
This approach is continuing with theLineage 1000, a business jet adaptation of the ERJ, priced at $ 43 million including the interior. Embraer anticipates three or four corporate sales a year for the aircraft, which will enter service in 2008.
Being adaptations of aircraft that are optimized as regional airliners puts both the Legacy and Lineage at something of a disadvantage as business jets. But Embraer has announced plans to develop a family of aircraft specifically designed for this market. Known as the Phenom series, the new jets have received a very positive market reception, with a combined total of over 450 sales.
The first to arrive will be the Phenom 100, a very light jet with seating for six or seven passengers. Priced at $ 3.4 million,it flew for the first time in July and will enter service in mid-2008. It will be followed by the Phenom 300, a light jet model with seating for nine passengers. Priced at $ 6.7 million, it will enter service in mid-2009.
Embraer will also shortly introduce a new dedicated business jet, probably selling for about $ 10 million-$ 12 million (in today’s money). This would bridge the gap between the Phenom 300 and the Legacy and would enter service around 2011 or 2012. It also will likely receive a Phenom designation.
Focusing on the business jet market makes great sense for Embraer’s future strategy. The regional jet market peaked at $ 7.7 billion in deliveries, and has declined since, recovering only to a forecast $ 6.7 billion this year. By contrast, the business jet market has recently enjoyed unprecedented growth. It reached a new peak of $ 13.8 billion in deliveries in2006, with all manufacturers predicting growth for the next three years at least. Teal Group projects business jet deliveries will reach a new market peak of $ 18 billion in 2010 compared with a relatively flat regional aircraft market.
Although these numbers sound appealing, there are hurdles to Embraer’s progress in this market. The five established business jet players—Bombardier, Dassault, Cessna, Hawker Beechcraft, and Gulfstream—all have elaborate sales and product support networks. Embraer will not be able to develop such networks overnight, as they are considerably different from the kind of support presence the company has for its regional airliner products. The established players also have proven track records with new product development, and will be very effective at countering any new Embraer model introductions with competitive designs of their own.
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