Embraer eyes 100 commercial jet deliveries per year in 2028, CEO says

Embraer anticipates reaching 100 commercial aircraft deliveries annually by 2028, a target pushed back by ongoing supply chain issues, notably impacting 2026 production. Despite these constraints, the Brazilian planemaker projects 77-85 deliveries this year and has solidified its strong backlog with recent orders, including a significant 50 E195-E2 jets for Avelo Airlines, its first U.S. E2 deal. The company remains committed to its Brazilian production base, opting against a U.S. E2 assembly line due to high investment costs, instead emphasizing its substantial U.S. supply chain engagement.

Analysis

Embraer (ERJ) has established a clear long-term delivery target, aiming to reach 100 commercial aircraft per year by 2028, a level not seen since 2017. However, CEO Francisco Gomes Neto has tempered near-term expectations, citing persistent supply chain disruptions as the primary constraint preventing an earlier ramp-up, with 2026 flagged as a particularly "challenging year." Current bottlenecks have shifted to fuselage parts from Europe and GE Aerospace engines for first-generation E1 jets. Despite these production headwinds, demand remains strong, evidenced by a new firm order for 50 E195-E2 jets from U.S. carrier Avelo Airlines—the first U.S. deal for the E2. This order bolsters a backlog that has production slots for 2026 and 2027 almost fully committed, providing significant revenue visibility. Strategically, management has decided against a capital-intensive U.S. assembly line for the E2, viewing the investment as a threat to product competitiveness despite a 10% U.S. tariff. Instead, Embraer is emphasizing its $21 billion in planned purchases from U.S. suppliers over five years as a key part of its business case in the region.

Key Decisions for Investors

• Investors should adopt a long-term perspective, as significant delivery growth is back-loaded toward 2027-2028, with the company signaling continued production challenges through 2026.
• Monitor specific supply chain developments related to European fuselage parts and GE E1 engines, as these are the key variables determining Embraer's ability to meet its guidance of 77-85 deliveries this year.
• The core investment thesis hinges on execution risk; weigh the robust, multi-year demand backlog against the clearly articulated production and supply chain constraints.
• Consider the decision to forego a U.S. plant a positive for near-term capital discipline and margin preservation, but note the ongoing exposure to the 10% U.S. tariff, which could impact the profitability of future E2 sales in that market.