The airline industry has transported over four billion passengers in 2018 and over one billion are estimated to have flown on an aircraft in the sub 150-seat sector. This segment connects more than 15,000 markets (~60% of all markets directly linked) and it is the single service provider in around half of them.
Impressive figures like these show the relevance of the up to 150-seat segment which – we believe – will be strengthened by the current pursuit for profitability.
Despite great results that have been shown by the industry since 2015, when the EBIT Margin touched the unprecedented level of 8.6%, we have seen those margins falling, systematically: 2016: 8.5%, 2017: 7.5%, 2018: 5.8%. For sure, those numbers are still strong, but it’s quite reasonable to consider that the peak of this great cycle is behind us. In every region we see similar impacts on the airlines’ margins.
Meanwhile, we have seen some very important movements from the airline industry highlighting the relevance of our segment. Last year, for instance, we had a book-to-bill of 2.3 versus 1.0 (the industry’s average).
The up to 150-seat segment represents a very adaptable alternative to sustainable growth for the airline industry as it can serve multiple missions, with a very low risk and now – following the arrival of the E2 Family – with the most efficient single-aisle platform.
After 50 years of existence, we are more prepared than ever to continue serving and helping to shape the future of this great industry.
President & CEO of Embraer Commercial Aviation