Brazilian regional aircraft maker Embraer (ERJ) delivered very strong 2024 financial results, and the airplane maker should benefit from a rapid increase in the global demand for regional jets going forward.
Over the longer term, ERJ could very well get a very big financial lift from its subsidiary, Eve Air, which is developing electric vertical take-off and landing (eVTOL) aircraft.
Impressive Financial Results and Expected Rapid Growth in Regional Jet Sales
Last year, Embraer’s revenue surged 21% to a record $6.4 billion, while its adjusted earnings before income and taxes came in at an impressive $708.2 million. For the current year, ERJ expects its revenue to jump to $7 billion to $7.5 billion. Embraer also predicted that it would generate an adjusted EBIT margin of 7.5% to 8.3% in 2025. Finally, the company expects to deliver about 231 aircraft this year, up from 206 last year and 181 in 2023.
Meanwhile, on April 7, IBA, an aviation intelligence and advisory company, noted that the “demand for regional travel remains robust, with revenue passenger kilometres (RPKs) for turboprop and regional jet aircraft increasing by 14.4% “between January 2024 and January 2025.
Further, “IBA anticipates that this strong demand will persist and grow at healthy rates, particularly in APAC, where rising populations and improving regional connectivity are driving expansion.”
Embraer is poised to benefit significantly from the latter trend going forward.
eVTOLs Could Meaningfully Boost ERJ’s Fortunes Over the Longer Term
Embraer’s eVTOL subsidiary, Eve Air, has been making meaningful progress in recent months.
In December, Eve disclosed that Helicopters Inc, a U.S.-based helicopter operator, had signed a letter of intent to buy up to 50 eVTOLs from Eve.
“Eve Air Mobility’s maturity and reliability, backed by Embraer, one of the world’s largest manufacturers of commercial aircraft, was a key factor in our decision to select Eve for our future eVTOL aircraft,” said Tom Wagner, President of Helicopters Inc in a statement.
As of December, Eve had reportedly racked up letters of intent for the delivery of almost 3,000 eVTOLs.
And last month, Aviation Week reported that Eve was planning to carry out the first flight of its eVTOL prototype “toward the middle of this year.”
The U.S. Air Force has shown a great deal of interest in eVTOLs, working closely with two American eVTOl makers: Joby (JOBY) and Archer (ACHR). Given the Air Force’s interest in eVTOLs, I believe that other countries’ militaries could very well look to buy Eve’s aircraft down the road.
Moreover, eVTOLs, which are much cheaper to operate than helicopters and reportedly will be comparable in price to the most expensive Uber (UBER) rides, could play a huge role in alleviating the heavy traffic that encumbers many large cities around the world. And Eve could supply many of the eVTOLs that accomplish the latter goal.
*This article is intended to be informational only; it is not financial advice.
