Brazil’s Embraer bets on smaller jets for post-pandemic success

In its quest to roar back after the turmoil of the pandemic, Brazilian aerospace and defence group Embraer is imagining a not so far-off future of flying taxis and electric planes. But as it strives to double revenues over five years, the world’s third-largest commercial plane maker has pinned its hopes on a more prosaic prediction: that the recovery in air travel will involve greater use of the smaller passenger jets that are its niche. After two years of upheaval for the global aviation industry, Embraer is due to return to the black in 2022, according to CE Francisco Gomes Neto. “We expect to deliver a net profit at the end of the year. This is an important step,” he said at Embraer’s headquarters in the city of São José dos Campos. “Our plan is big growth . . . [it] follows the resumption of domestic flights, which is where our planes fit in.”  A share price surge of 45% made the company the best performer on the local Bovespa index in 2021. After axing 2,500 jobs during the pandemic, an efficiency drive and debt reduction helped it swing back into positive free cash flow. As it ramps up production, the group has recently announced 1,000 new vacancies. But to convince investors, especially after a sharp fall in the stock this year, it must overcome scepticism about its ability to expand further in a civil aircraft sector dominated by Boeing and Airbus. Doubts over the future shape and direction of an enterprise considered the crown jewel of Brazilian industry were compounded by the acrimonious collapse of a planned tie-up with Boeing. Not long after airports shuttered early in the pandemic, the US titan terminated a joint venture agreement that would have given it an 80% stake in Embraer’s commercial aircraft operations for $4.2b. <br/>