Embraer expects to expand output both in its commercial and executive jet businesses in 2022 in an effort to compensate revenue shortfalls in its struggling defense business, hit by a reduction of Brazil’s KC-390 military transport order.

According to Embraer CEO Francisco Gomes Neto, Embraer is targeting 60-70 commercial aircraft and 100-110 executive jet deliveries in 2022. That compares to 48 and 93 aircraft deliveries, respectively, for 2021. Revenues are to increase to $4.5-5 billion from $4.2 billion (2020: $3.7 billion) with the group targeting an adjusted operating profit margin of 3.5-4.5%.

Embraer achieved a $167 million adjusted operating profit in 2021, following a $101 million loss a year earlier. The net loss narrowed from $464 million to $29 million and Neto said the company will work “diligently” to reach a net profit again in 2022.

Like much of the rest of the industry, Embraer has been going through a tumultuous two-year period as it struggled with the fallout of the COVID-19 pandemic and other issues. The group had to reintegrate the commercial aircraft division after Boeing walked away from a deal to take control of the unit in early 2020. Deliveries of commercial aircraft fell significantly. Embraer’s future strategy includes the possible launch of a new turboprop aircraft and a venture into advanced air mobility through its Embraer Eve spin-off.

Embraer’s slow revenue recovery was mainly driven by the services and support unit, with revenues increasing by 23% to $1.1 billion, followed by commercial aircraft, sales of which were up 18% to $1.3 billion. By revenues, the executive jet business is now almost exactly the same size as services, at $1.1 billion for 2021, up 5.5% YOY. The defense business contracted by 9% YOY to $596 million mainly because of the Brazilian Air Force’s decision to reduce its order for KC-390s from 28 to 22 aircraft.

Neto said March 10 that Embraer does not see any “major impact” of the Russian invasion of Ukraine as the company has built up sufficient supplies inventory for the short- and medium-term. Nonetheless, Embraer is “monitoring the situation on a daily basis.”