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Embraer Market Analysis

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IntroductionEvery technical development requires a market analysis. This analysis is essential to establish a basis forpro tability. Some questions to be answered are: Who are the customers? Who are the competitors?What is the size of the market? How does the market change over time?Global developmentAccording to the World Bank, a United Nations (UN) international nancial institution, the globalGross Domestic Product (GDP) is expected to rise 3.2% annually over the next 20 years. For emergingeconomies a projected growth rate of 5.4% per year is expected, while advanced economies will experience2.2% in the same period. The fastest-growing regions are identi ed as South Asia with a GDP increaseof 6.8%; Africa, 5.1%; the Middle …show more content…

Consequently, when considering ights above 2300 km, the probability of choosinga regional aircraft over a narrow-body one is very small.The Embraer market outlook for 2014-2033, one of biggest players in the regional aircraft market,identi es the potential of regional jets in each region of the globe. The rst observation is that Embraerdoes not consider jets with a capacity below 70 passengers. Embraer identi ed a large need for regionaljets in North-America, Europe and China.In recent years air transport growth has been directly linked to low cost carrier (LCC) expansion. Closeto 30% of current worldwide capacity generated …show more content…

Additionally, the Chinesegovernment plans to increase the number of airports in the country from 175 in 2010 to 230 in the next10 years, which will further support the growth of regional air transportation in the country. [?]Europe is a main market for regional aircraft, with an expected number of more than 1000 regionalaircraft to be delivered by 2033. However, more than 50% of those deliveries are expected to replaceexisting aircraft. Economic growth in Northern Europe is expected to remains stronger than that ofSouthern Europe. However, there is potential of increase in air transportation for the Eastern-Europeancountries.Large growth is expected in Latin America, with 700 estimated deliveries in the next 20 years. Approx-imately 65% percent of these deliveries account for trac growth. Mexico is expected to be the largestmarket because of a more relaxed scal policy and increasing trac demand with the United States. [?]In the Asia-Paci c region, there is potential for new regional aircraft both in the advanced economies ofJapan and Australia, but also in the emerging countries such as Indonesia, Vietnam and the Philippines.Embraer estimates that around 500 regional aircraft (mostly 70 to 130-seats) will be delivered by 2033.In the Commonwealth of Independent States

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From the Aircraft Deliveries Table, we can find that the most popular aircraft is Global 5000/6000. The number of sales between January to June in 2016 is 136. The major competitor of Global series is Gulfstream and Dassault Falcon series. In 2012, Gulfstream (at 556 units) has a 49% share of the market- making it the market-share leader versus Bombardier’s 37% share (424 units) and Dassault Falcon’s 13% share. (Chase, M. 2012)

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The company will require developing plans that will see them increase their presence in both the domestic and international market. However, the company must first prioritize on increasing their presence in the domestic market. That plans that will involve frequent flights to all the major cities in the U.S.A. Currently, the company has six major focus cities; New York JKF, Fort Lauderdale, Los Angeles, Orlando, and San Juan. While these cities continue to be profitable to the company (CAPA Center for Aviation, 2015), they should consider increasing their access to other cities as well. Frequent and extensive flights in the San Diego and the San Francisco Bay Area will enable the company to capitalize on the business and tourist travels.

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If the market is in recession the demand can be expected to be on the lower side whereas in case of boom condition, demand will definitely be much higher. Competitors: The strategies of the competitors over the past periods should be analysed in depth and should be used to fine tune the forecast for next

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Aviation travel is exploding. Because it is the quickest way to travel, flying is the most popular way to travel seeing as how millions of people choose to fly for long trips. With the popularity of flying increasing and more people choosing to fly more, hence a demand for larger capacity airliners. There are many items about each jumbo jet that make them what they are. The Boeing Company’s 747-200 is a massive wide bodied jet specifically designed for extremely long trips.

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• Threat of substitute goods: Threat of substitute good is high in this industry. If a private company or government introduces any fast road transportation services in the United States, then traveling through airline can reduce. Air travel is somehow costlier than road transport. If the same kind of leisure will be provided in public transport with greater speed, then the share of airline industry can decline. This threat can be reduced if their products offer more value than other substitute

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Social Growing competition and capacity amongst airlines, lower air fares and more relaxed travel restrictions in many regions have made international travel a viable option for an increasing number of people coming to

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Economic Environment Factors such as Crude oil prices, aircraft prices, Economies of Scale may also have effect on the airline industry. Social Environment Tourists and Business travellers contribute to the growth of the airline industry. Technological The use of modern technology by the airline manufacturers can contribute significantly to the growth of the

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Technological changes happen in those areas where the technological adoption took place. Andrew D. Foster (2010) defines “technology adoption is defined as a situation in which there are substantial unrealized gains to the use of a new technology or expansion of input use. It is thus generally reflected in a high return to adoption or input use at the relevant margin” . Feder et al. (1985) work mentioned that major work on technology adoption focused on low-income countries.

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For worldwide airline industry, opportunities can emerge from new client expectations, items, business sector structures or regulatory

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For instance, with the global financial crisis and later the Eurozone crisis, the number of travellers has significantly reduced due to economic hardships. This has affected the profit levels of the airline as well as slowed down its growth prospects. The airline also faces intense competition from other low cost airlines forcing it to extensively invest in product differentiation to counter the competition. This is an expensive

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If imports climb quicker than fares, a certain deficit may be noticed. On the other hand, development could be fare headed e.g. Japan 's development in the 1960s and 70s and China as of

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