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Embraer ( EMBJ ) studies new products for long-term growth

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No timeline set for decisions

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Supply chain snags persist despite improvements

By Gabriel Araujo

SAO PAULO, Nov 5 (Reuters) - Embraer ( EMBJ ) is

studying new products that could drive long-term growth, but

these would have to be considered in light of the Brazilian

planemaker's finances, CEO Francisco Gomes Neto told Reuters.

In recent years, the company has often been linked to the

potential development of larger commercial aircraft to compete

directly with Boeing ( BA ) and Airbus, but Gomes Neto

noted there is also demand for larger executive jets.

"Our market intelligence and engineering teams are studying

all alternatives. At some point, we'll choose which path to

take," he said in an interview on Tuesday.

DEVELOPING NEW MODELS BRINGS HIGH COSTS

New airplane models typically require billions of dollars in

capital expenditures and take years to enter the market. While

Embraer's ( EMBJ ) debt levels are under control, jetmakers including

regional jet competitor Bombardier have a history of financial

struggles linked to new product launches.

Embraer ( EMBJ ) focuses on the regional commercial segment of 70 to

140 passengers. Its E2 family competes with Airbus' A220, but

stands below the core 150-plus-seat market dominated by Airbus

and Boeing ( BA ).

In the business jet market, the firm competes in the

very-light to super-mid-size categories, with its largest

Praetor 600 model seating up to 12 passengers while firms such

as Dassault offer bigger aircraft.

Future projects, Gomes Neto said, depend "on the product we

believe we can develop, the funding strategy that doesn't

jeopardize the company's financial capacity, and our customers."

"Over the next few years, we'll focus on investing in new

technology and maturing these studies around what Embraer's ( EMBJ )

future products will be," he added. "We don't have a timeline

for that decision."

The planemaker expects to reach $10 billion in annual

revenues by 2030 and has enjoyed strong demand for its

portfolio, with its shares more than quadrupling in value since

late 2023.

SUPPLY CHAIN SNAGS

The executive said that Embraer ( EMBJ ) has secured the parts it

needs to assemble aircraft it had targeted for delivery by

year-end, but many arrived late, meaning that deliveries will be

concentrated in the fourth quarter.

The industry has grappled with supply chain bottlenecks in

recent years that affected output plans and delayed deliveries.

"Next year will still bring some challenges," Gomes Neto

said. "On average, it's improving, but we still have some

specific parts that will be difficult."

He said previous delays and other issues with the RTX's

Pratt & Whitney engines equipping the E2 family have

been "practically resolved."

"This year we didn't face any problems receiving GTF

engines, and we're not anticipating issues for next year

either," he said.