Filling the gap

Embraer is targeting an unexploited niche with the 170/190 family. There are currently no aircraft flying specifically designed to carry between 70 and 110 passengers, and the regional jet-maker sees this as a market with potential.

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By  Neil Denslow Published  December 4, 2003

I|~||~||~|Embraer’s 170/190 family is the first aircraft specifically built to fill what the Brazilian manufacturer calls ‘the 70 to 110 gap.’ There are currently no aircraft flying built to carry between 70 and 110 passengers, but Embraer believes that this niche represents a significant market opportunity. Early sales figures, led by 100 firm orders for the 190 from jetBlue plus 100 options, suggest that the company could well be right.

The 170 family encompasses four planes — the 170, 175, 190 and 195 — with capacity ranging from 70 to 108 seats. Work on the family began five years ago, and Embraer has invested US $850 million in developing the project. It is by far the biggest plane built by the Brazilian company, which previously had only reached up to 45 seats with a stretched version of its Legacy executive jet series.

So far, 40 170s have either been completed or are under construction at Embraer’s manufacturing plant in Sao Paulo. All of them have been pre-sold, with the first planes being painted in livery of either US Airways, which has ordered 85 170s, or, launch customer, Alitalia. Other confirmed buyers include the Polish national carrier, LOT, Swiss and Air Caribes. “This represents quite positive numbers for a new family [of aircraft] that is still under development,” says Embraer’s executive vice president for corporate communications, Horacio Forjaz

Deliveries were scheduled to begin this month, but they have been put back until next year due to a delay in the certification process. The company attributes the hold-up to administrative matters though, rather than to mechanical issues.

When Embraer started work on the 170 family in 1998, it was confident about the aircraft’s potential market. However, the events of 9/11 have enhanced its expectations even further, as the ongoing aviation downturn has forced carriers, especially in the US, to reassess their fleet and to examine the virtues of regional jets. “We didn’t know how strong the product was until the fallout from 9/11,” says Forjaz. “As companies began to seek Chapter 11 we saw some begin to look at just this size of jet.”

“The US carriers no longer want to fly half empty DC10s and other larger jets. They want to fly small capacity aircraft — full but with the extra comfort and economy levels that this [170] family of jets offers.”

The other factor boosting interest in regional jets is a greater sensitivity in the US about flying high salaried, and highly insured, corporate leaders on widebody commercial aircraft. American companies “are now nervous about flying their top executives in large [commercial] jets,” says Forjaz.

To meet the requirements of this market, the 170 has been specifically designed to be able to operate at smaller urban airports. These are the most convenient for business travellers, but they tend to have the shortest runways and the strictest environmental regulations.

Key to meeting the challenge of operating in these airports is the engines. The 170 family uses ultra-efficient CF34 engines from GE Aircraft Engines, which come in three variants, ranging from 13 170 lbs of thrust to 14 200 lbs. The carbon dioxide, nitrous oxide, UHC and smoke emissions from the power plants are 50% to 80% below ICAO standards; takeoff, sideline and approach noise levels also comply with the highest standards. As such, it is an environmentally friendly airplane, welcome at the most restrictive airports in the world.

The 170 is also able to take off in 1236 metres and land in 1244 metres, so it can service testing airports like London City and the mountain-locked cities of the Alps. Indeed, it is the only aircraft of its size that can take off and land at London City.

The range of the 170 is 200 nautical miles, with a cruising speed of Mach 0.82, even when carrying a full load of 70 passengers with an average weight of 200 lbs. The long-range 190 can operate up to 2200 nautical miles, which brings a large portion of Europe within its range from the Middle East.

Maximum payloads for the 170 family range from 8600 kilos to 13 530 kilos. The plane makes the most of this capacity by incorporating two cargo holds in the belly. This means that unlike other regional jets, the 170 offers the option of carrying revenue-rich freight as well as passengers.

To further enhance the plane’s revenue generating potential, Embraer has also designed it to have as short a turnaround time as possible. The two baggage holds, the positioning of the ground service points and the location of the passenger exits have all been designed to speed ground handling operations, and thus cut the time the plane sits on the apron between flights.

Altogether, the 170 is a medium-sized jet built on big jet principles. It is, for instance, the first aircraft of its size to be fly-by-wire, and it also has Honeywell’s Primus Suite for the avionics. This means that the aircraft has all the functionality and a greater degree of integration than is found in some wide-bodied jets.

||**||II|~||~||~|The plane is therefore a major departure for Embraer, and the company has designed it from scratch. Its development has led to the building of a new airfield and industrial facility in the middle of thousands of acres of orange groves at Gaviao Peixoto, 40 minutes flying time north of the Sao Paulo factory. The new facility has a 5 Km runway, which is the longest in the Southern Hemisphere. The new Embraer Virtual Reality Centre in Sao Paulo, which is credited with dramatically cutting development time, is also the first of its kind south of the Equator.

Aviation Business Middle East flew in the sixth prototype, and even though it was ten days before the expected certification date, the front row of seats were equipped with computer workstations monitoring every function possible. This plane had been the test bed for some ‘serious abuse’ exercises — the seats, for instance, had already suffered the equivalent of several years of misuse. Judging from the resulting superficial scuffmarks but unimpaired comfort, however, the upholstery clearly stood up to it.

The seats also represent a serious development in passenger comfort. The pitch is a generous 32 inches and they are slightly higher and wider than the average coach class seat. The difference is just half an inch, but regular travellers will notice the extra space. The seats are also half a kilo lighter than regular models, which, in the 195, the 118-seat version of the family, results in a weight saving of nearly 60 kilos.

It is this kind of attention to detail and search for new materials that makes the ERJ190 no less than five tonnes lighter than the Airbus A318, the closest comparable aircraft. The two went to head-to-head recently to supply US operator jetBlue’s new fleet, and Embraer won the contract for 100 planes, with an option for a further 100. “The jetBlue deal was a big surprise to us because we were up against the A318,” says Forjaz

One major advantage held by Embraer over its rivals is pricing. The 70-seat version, for instance, has a list price of just US $25 million. Being based in Brazil helps Embraer achieve these low costs, as labour is comparatively cheap. The company’s employees earn an average of $1100 a month, which is high when compared with the national average in Brazil, but a lot lower than wages in the industrialised North. The employees also benefit from an enlightened profit-sharing scheme, which usually provides them with an annual bonus in the region of six months’ salary.

“It [the low wage costs] is one element, but we consider that one of the main competitive advantages that we have is not in industrial labour costs, but quality, competence and productivity on the engineering side,” says Forjaz. “What we have been able to do with $1 billion and the speed with which we have done it is attracting the interest of our competitors.”

“There is also the pride factor of our employees. They want to prove that they can perform to world standards. The way we mix people and machines is not the same as Airbus, for instance, which is more automated, but we find our way gives us high levels of quality and productivity,” he continues.

Bring these advantages to bear on the neglected 70-110 seater market looks like a sound plan for Embraer. The company is staking its future on the 170/190 family, but the early sales and growing interest from carriers in regional jets suggests it has made the right decision.

“There is actually nobody apart from Embraer producing aircraft in the 70/110 range of new generation, that is high comfort, high performance, yet low consumption, passenger airplanes,” says Forjaz. “This is where the company is betting its future, and we have over $1 billion committed to further development,” he adds.||**||

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