Key facts
- Airlines are delaying decisions on exercising aircraft purchase options.
- Uncertainties stem from the war in Iran and increased jet fuel prices.
- Embraer has not observed requests for delivery deferrals or a slowdown in sales.
- A growing sense of caution exists regarding incremental commitments to aircraft purchases.
- Embraer aims to deliver between 95 and 100 commercial aircraft in 2027.
Embraer CEO Francisco Gomes Neto stated that the ongoing conflict in Iran is causing some airlines to postpone decisions regarding the exercise of their aircraft purchase options. This hesitation is attributed to the increased uncertainty and the significant rise in jet fuel prices resulting from the geopolitical situation. Despite these concerns, Gomes Neto clarified that Embraer has not yet seen any actual requests for delivery deferrals or a general slowdown in sales. However, he noted a growing sense of caution among airlines concerning new, incremental commitments to aircraft purchases. Embraer's commercial backlog spans nearly five years of deliveries, and the company continues to pursue multiple sales campaigns for its E2 family, hoping to clinch some deals at the Farnborough Airshow. The company aims to build on recent deals, including agreements with Finnair for 18 aircraft and lessor Azorra for 15, after a strong 2025, believing the E2's fuel efficiency can boost demand. Embraer aims to deliver between 95 and 100 commercial aircraft in 2027, with an outlook of 80 to 85 planes for this year, a goal dependent more on supply chains improving than geopolitical tensions resolving. The firm also aims to improve margins in its commercial aviation unit by renegotiating older, less profitable contracts and expects stronger demand for new deals to support better pricing. Kamil Al-Awadhi, regional VP for Africa and the Middle East for the airline trade group IATA, stated that deferring jet orders due to uncertainty and higher jet fuel prices caused by the war in Iran would be unwise for Middle Eastern carriers, as the decision could be costly in the long term. He does not expect the war and higher costs to affect aircraft orders from Middle Eastern carriers, noting that deferrals are not wise due to long waiting times for aircraft.