Brazil's Embraer forecasts demand for 10,950 planes worth $650bn over next 20 years

Global passenger traffic to grow at an average annual rate of 3.2% until 2041

The plane manufacturer Embraer released its encouraging report at Farnborough Airshow in the UK on Tuesday. AFP

Brazilian plane maker Embraer expects demand for new aircraft with up to 150 seats to reach 10,950 deliveries worth $650 billion over the next two decades, holding steady from last year's forecast.

Replacing older aircraft will account for 57 per cent of all new deliveries, while 43 per cent will be used for growth, it said in its 20-year market outlook for the sub-150 seat commercial aircraft segment, which was released at Farnborough Airshow in the UK on Tuesday.

Of the 10,950 small jets and turboprops, 3.8 per cent or 330 units will be delivered to the Middle East.

"The trend to smaller aircraft reflects overall lower demand growth, traffic patterns favouring short-haul versus long-haul, an increasing need for flexibility, connectivity, efficiency, and fleet and network transition to a decarbonised industry through new technology," said Embraer, the world's third-biggest aircraft manufacturer behind Boeing and Airbus.

Embraer's outlook remains little changed from last year's forecast for 10,900 aircraft. The manufacturer specialises in smaller, regional planes.

Short-haul flights will drive demand for 2,280 new turboprops globally over the next 20 years, mostly focused in Asia Pacific, Europe and North America, Embraer said. The Middle East makes up 1.8 per cent or 40 units of these, it said.

Embraer is in the process of selecting an engine maker to power its proposed passenger turboprop aircraft and expects to make a decision by the end of this year, Arjan Meijer, chief executive of Embraer’s commercial aircraft unit, told The National last month.

The company is in advanced talks with conventional manufacturers Pratt & Whitney, Rolls-Royce and GE, he said.

Embraer plans to launch the turboprop programme by mid-2023, with entry into service scheduled for early 2028.

The manufacturer expects global passenger demand for air travel, measured by revenue passenger kilometres (RPKs), to increase at an average annual rate of 3.2 per cent through to 2041 — roughly in line with last year's estimate of 3.3 per cent growth.

"The rate is a notable deceleration compared to pre-pandemic growth rates for the next two decades, a reflection of the effects of the pandemic itself, expected deceleration of the global economy and effects of the Russia-Ukraine conflict," Embraer said.

Over the next 20 years, Asia Pacific (including China) will show the strongest growth, increasing travel demand by 4.3 per cent annually, the plane maker said. This will be followed by Latin America (4 per cent), Africa (3.8 per cent), the Middle East (3.2 per cent), Europe (2.3 per cent, including CIS) and North America (2 per cent).

Embraer also expects the continued strong growth in e-commerce to create new opportunities for smaller all-cargo jet aircraft and for more passenger-to-freighter jet conversions.

"Smaller aircraft are gaining relevance in the cargo industry and there is a gap to bridge between turboprops and large standard-body jets," it said. "That gap is ideal for small and crossover standard-body jets."

Since jets fly faster than turboprops, they can reach more distant destinations, provide essential additional time-on-ground for loading and keep up with market growth, according to the outlook. They can replace or complement larger standard-body jets in reaching decentralised regions because they can offer more competitive costs per trip.