Tuesday, March 20, 2012

Embraer sees private jet takeoff in India

Embraer, the Brazilian executive jets company, foresees a significant expansion in the Indian private jets market, with the country accounting for about 90% of the demand in South Asia till 2021.

“Estimates show there would be a demand for 1,363-1,690 executive jets worth about $40-48 billion in the Asia Pacific market between 2012 and 2021. South Asia alone would require about 400-480 units worth about $10-12 billion. Of this, India would have a share of over 90%. China is estimated to have a demand for about 520-635 jets worth about $17-20 billion,” Jose Eduardo Costas, Embraer’s vice-president - marketing and sales, Asia Pacific, said.

India currently has 130-140 private jets in operations including 14 Embraers.

“Even in the projected numbers for the next 10 years, we hope to maintain our market share at over 10%,” he said.

To meet the growing demand, the company is expanding its field presence by setting up a second field support office after Mumbai by the first quarter of 2013. It is also entering into an agreement with Airworks for deployment of onsite stock of parts in the country.
The company is also hopeful of securing fresh orders for its new Legacy 650 aircraft, which has recently secured an approval from the Director General of Civil Aviation. “We will start deliveries of Legacy 650 later this year,” he said refusing to disclose the total order book the company has from India.

Embraer is also hopeful of finding market for pre-owned executive jets in India, though the inventory of those jets is said to be at a lower level compared to 2008.

“There are about 19,000 private jets worldwide and on an average about 9-11% come to the pre-owned market. During the peak of the recession the inventory was at about 15-16% since several jet owners were looking for liquidity. Today, it is back to 9-10%. If there is a fresh problem, there would be another surge in the pre-owned jets market. The numbers, however, are definitely not going to be higher this time,” Costas said.

Embraer estimates a demand for 8,600 to 11,200 private executive jets by 2021 and this is expected to present an opportunity worth about $200-260 billion to various manufacturers.

While North America would contribute about 49% to the total demand, Asia Pacific would be about 16-19%. The Europe, Middle East and Africa market would contribute about 27% to the demand while Latin America is pegged at about 8%.

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