Name: Embraer CEO cites supply chain struggles, expects turnaround by 2027
Uploaded: 2025-10-27T03:12:13.086Z
Duration: 4 min 44 s
Description: Francisco Gomes Neto, CEO of Embraer, says rising demand for narrow-body aircraft offers growth opportunities despite current supply chain challenges, with a full recovery expected by 2027.

Francisco Gomes Neto, CEO of Embraer, says rising demand for narrow-body aircraft offers growth opportunities despite current supply chain challenges, with a full recovery expected by 2027.

Kuala Lumpur

Embraer's CEO has acknowledged persistent supply chain challenges affecting the company's ability to meet aircraft demand, noting that shortages of parts are limiting production. Despite these difficulties, the CEO remains optimistic, citing gradual improvements in the supply chain and projecting a much better situation by 2027.

The CEO also highlighted growing opportunities for Embraer in both commercial and defense aviation, particularly in regions where airlines are seeking alternatives due to backlogs at major manufacturers. Embraer is actively engaging with potential clients and emphasizing the operational benefits of its aircraft, aiming to address concerns about maintenance and integration into existing fleets.

Embraer CEO cites supply chain struggles, expects turnaround by 2027

We see a lot of opportunities, especially if you focus on commercial in defence, with the E-2s, we believe it's the right aircraft to help improve the connectivity between small cities, beyond the major hubs, with efficiency, with comfort and sustainability. In defence, the C-390 is an unbeatable combination of superior performance and low operating costs. That's why we believe we are in the right moment to grow in the region. Right. The reason I ask about defence also is because, as you've probably noticed, what's been happening in the world, the geopolitical uncertainty, and there is a belief that defence spending is going to go up. Is this something that Embraer started to see in the last couple of months, actually, more interest from militaries, especially in Asia, who are trying to at least beef up their capabilities right now? No, absolutely. I mean, the C-390 is the aircraft that is chosen by the NATO members and the Allies in Europe. So we have now 11 countries that selected the C-390. One of them is South Korea, in the region. And we have been talking to other countries. I mean, we really believe that aircraft for that segment, as a multi-mission lifter, up to 26 tonnes, is the best alternative in the market right now. And we are in conversation with the different countries to replace older aircraft. And we see a lot of good opportunities for Embraer in the region. And that brings me to my next question, because when we speak to airlines, a lot of them are actually raising a lot of issues with regards to supply chain. They can't get enough airplanes, either quality issues from Boeing or the fact that Airbus is backed up. And this seems like it creates an opportunity for the likes of Embraer, Comac, to take more market share, actually. Do you feel like there's an opportunity or a window that's special right now for you to get more market share out there? And what do you think you need to do to get that? No, absolutely. I think it's a combination of two factors. One is this, is more better availability of aircraft in the short term. And the other one is that the airlines, they are understanding more the benefits of having a small narrowbody in their fleets to complement the larger narrowbodies. Look at the region here. We have a lot of turboprops with up to 80, 70, 80 seats. And the next one is a large narrowbody with 108. So nothing in the middle. So now we see Scoot, we see Avelo in the US, we see SAS, we see ANA, we see LATAM in South America. They all are bringing the small narrowbody to complement their fleets. And with that, to open new routes, to increase the frequency of flights in a profitable way. Then we see the combination of the two factors. I think it's opening opportunities for us. But we have announced several new deals this year. I mean, ANA in Japan, SAS in Scandinavia, Avelo in the US, and LATAM in Brazil. And do you feel like the current bottlenecks or supply chain issues are creating these opportunities and it's making it easier for Embraer to make their case that, hey, we can be a third option as well? Well, not easier because we are suffering with the supply chain as well. We could make more aircraft than we are making because of short of parts. But I'd say that, in average, the supply chain performance is improving. We believe we still have some issues in 2026, but I see 2027 much better in terms of supply chain. A few weeks ago, we spoke to the folks at Thai Airways and we actually asked them because they said that they were also having trouble meeting the expansion demands because of issues with the other two manufacturers. And I asked him, is there room for a COMAC or an Embraer? And he said that the issue is maintenance costs and stretching costs. I'll have to create new maintenance costs to take care of the new systems and all of that. And they say that this might hinder someone like Embraer to come in. For airlines that might have that kind of hesitancy to entertain Embraer, how do you address those issues? Because it seems like it's a bit of a mindset thing for potential clients. How do you approach that challenge? We're showing them all the calculations, all the benefits they can have operating our aircraft that will compensate this kind of, what they say, more complex operation. We really believe that the combination of our aircraft with the large and narrow bodies is a perfect formula for an airline to grow profitably.

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