Embraer boosted services revenues 24% in the second quarter, benefiting from higher volumes and the company’s broader strategy to grow its aftermarket business.
Growth “across all segments” contributed to the $565 million in sales for Embraer’s Services & Support business unit, the company said. Its adjusted EBIT margin increased 230 basis points (bp) to 18.7%—a figure Embraer says it can maintain.
“When we look to the 17%, almost 18% of margin on service and support on [the second quarter], we really believe that should be the way” for the next few quarters, CFO Felipe Santana Santiago de Lima said on the company’s recent earnings call. “Mainly because of the scale that we have and also all these new deals that we’ve been signing on pool agreements.”
Recent wins include a deal with Canadian regional carrier Jazz Aviation to support 25 E175s and an extension of its heavy maintenance agreement with U.S. regional carrier SkyWest Airlines.
Embraer is pushing to grow its services business to $3 billion annually by the end of the decade, up from about $1.9 billion in 2025 and $1.6 billion two years ago. While increasing work on its own products is part of the equation, a large boost is expected from work on other products.
Its OGMA MRO subsidiary has seen revenues grow from about $205 million in 2022 to $343 million last year. OGMA is on track to top that figure in 2026.
“OGMA should be running something close to $350 to 400 million of revenues this year,” said Embraer’s head of investor relations, Gui Paiva. “The bulk of that is going to be non-Embraer fleets.”
The facility’s recently opened Pratt & Whitney PW1000G geared turbofan shop is expected to drive significant revenue growth in the coming years. Plans call for it to service as many as 240 engines annually by 2030—a mix of PW1000Gs and PW1900Gs.
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