Kerry Lynch stepped into the role of editor of the&nbsp;Aviation International News&nbsp;monthly magazine in May 2022 after serving with&nbsp;AIN&nbsp;for eight years. She joined&nbsp;AIN&nbsp;in December 2014 as a senior editor covering Washington and business aviation news. She has also served on Convention News teams, including as editor of&nbsp;HAI Convention News. Lynch previously spent 25 years with Aviation Week. During her time there, she reported for and later steered&nbsp;The Weekly of Business Aviation, oversaw business aviation content on the&nbsp;Aviation Week Intelligence Network, served on the&nbsp;Show News&nbsp;staff, and held roles as the Washington columnist for&nbsp;Business &amp; Commercial Aviation&nbsp;and&nbsp;Overhaul &amp; Maintenance&nbsp;monthly magazines. In 2021 she was honored with the National Business Aviation Association Platinum Wing Award for lifetime achievement in journalism and was the 2004 recipient of the National Air Transportation Association’s Aviation Journalism Excellence Award. She also has been a recipient of an Aerospace Media Award for business aviation (2022) and NBAA Gold Wing Award (2003, 2024). Lynch graduated from The Ohio State University with a bachelor of arts in journalism.

Editor, AIN monthly magazine

Kerry Lynch

Embraer’s executive jet unit has proven itself a market disruptor, but whether it can sustain that level without new announced products in development and with discounted pricing remains to be seen, particularly <a href="https://www.ainonline.com/aviation-news/air-transport/2018-07-05/boeing-and-embraer-agree-475-billion-commercial-jv">as it is separated from the Brazilian manufacturer’s commercial aviation business</a>, market analyst UBS Global Research said in an August 15 market report. Earlier this week at the LABACE show, Embraer executives expressed confidence, saying the business jet division is refining existing models and has plans for developing new products, as well as expanding its customer support.

 


UBS believes that Embraer as a whole is positioned for improved earnings ratios next year, even without the commercial aviation unit. It estimated as much as an 18 percent improvement in EBITDA for its combined defense and executive jets segment. For Embraer Executive Jets, this estimate is buoyed by a business jet market that is “on the mend,” with improved used inventory and pricing stabilization. The slow growth in utilization and OEM competition, however, dampens that outlook.

 


The company's executive jet business “has clearly cemented itself as a disruptor,” with deliveries rising from a handful in 2003 to more than 100 each year over the last five years, UBS said. But the analyst provides a more cautious outlook for the unit, expressing doubt that the Executive Jets unit will gain additional share “as they currently have no significant new products on the horizon and they will not be able to continue to undercut their competitors on price.”

 


According to UBS, the rise of Embraer Executive Jets over the past 15 years is impressive as sales ballooned from $300 million in 2005 to more than $1.7 billion in 2015 and 2016. “Unfortunately, despite the growth in sales, the company has struggled with profitability,” UBS said. “The business cannot continue to operate at a loss, especially if the commercial jet business is no longer helping to offset those losses.”

 


Deliveries softened 7 percent in 2017 to 109 and have been down 20 percent in the first half, UBS noted, adding, “losses have mounted again.”

 


Embraer has refocused the business to improve the bottom line and move away from pricing. “It remains to be seen how, if at all, end-market demand returns and if the company can successfully transition the business,” UBS said. “As they move away from pricing, it could prove to be a double-edged sword as volumes could be impacted and what we’ve seen from Embraer over the years is that operating performance is heavily dependent on volume.”

UBS: Embraer Bizjet Unit Faces Uncertainties

Profitability could be a struggle for Embraer Executive Jets without offsets from Commercial Aviation unit, UBS cautions.

2024 Corporate Aviation Leadership Summit

AIN Products

SUBSCRIPTIONS

RESOURCES

ABOUT AIN