Embraer’s aftermarket arm contributed 50% of the Brazilian manufacturer’s pre-tax profit in the first quarter of this year.
And it did so at a margin of 14.9%—triple that of Embraer’s commercial aircraft business and double that of executive aviation.
While Embraer’s services business spans the breadth of its commercial, defense and business jet activities, support for commercial aircraft is well developed with more than 200 customers, plus an aircraft and engine maintenance joint venture, OGMA, in Portugal.
In total, its revenues, which were around 41% of Embraer’s total sales in the quarter, split roughly as follows: 30% from MRO, 30% from spare parts, 30% from pooling services and 10% from other services.
Meanwhile, the backlog for services and support held firm at Embraer’s highest ever level of $3.1 billion.
The company’s commercial aircraft backlog is $11.1 billion, significantly higher than since the start of the pandemic yet still some way off the peak of $15.8 billion in 2015.
Embraer is planning for 72-80 commercial aircraft deliveries this year ahead of getting back to pre-pandemic production levels in 2025 and 2026.
“We remain optimistic that supply chain disruption should continue to diminish and improve our ability to deliver more aircraft in the next few years,” said Embraer’s president and CEO, Francisco Neto.
He added that while Embraer had seen improvements in general to its supply chain, it still faces difficulties regarding specific components and on-time deliveries.
“So we will still have difficulties in 2024 but in line with our plans to deliver the guidance, we expect even more improvements in 2025 [and] in the years ahead from our supply chain for both sides, commercial and defense," said Neto.
