Embraer (ERJ) Proposes the Idea of eVTOL Flights in South Korea
Embraer S.A.’s ERJ arm, Eve Air Mobility, recently proposed an idea of urban air mobility (UAM) operations in South Korea. The company introduced the novel concept for the South Korean market in collaboration with Jeju Air.
The two companies have joined forces to thoroughly assess the South Korean market regarding the requirements, opportunities and challenges associated with the safe implementation of electric vertical take-off and landing (eVTOL) flightson Jeju Island.
If implemented successfully, UAM operations will provide a novel pathway for economical, secure and eco-friendly transportation on Jeju Island.
Growth Prospects of the UAM Market
Of late, the UAM market’s prospects seem promising owing to an increased focus on the concept due to increasing urbanization, traffic congestion issues and continuously evolving technology. Consequently, this platform is attracting significant investments across the globe, which may further fuel the expansion of the market in the foreseeable future.
The advantages associated with the concept are grabbing the attention of aircraft manufacturers and urban transportation stakeholders. Traditional aviation firms with expertise in aerospace in collaboration with innovative startups with know-how in advanced technology are driving the interest in the market and potentially fueling its implementation.
In light of such factors, we may expect the UAM market to expand manifold. To this end, the Mordor Intelligence firm projects the UAM market to grow at a CAGR of 23.5% over the 2023-2025 period.
In light of such growth prospects, Embraer’s initiatives and strategies to establish a strong position in the global market through collaborations with airlines, like the latest one, could be prudent and result in a robust market position for Embraer as the demand for UAM rises, and it becomes more widely recognized.
Peer Moves
Other companies that stand to benefit from the growing UAM market are Airbus SE EADSY, Textron TXT and Boeing BA.
Airbus’ CityAirbus NextGen is an all-electric, four-seat eVTOL multicopter concept featuring a wing. It boasts an 80-km range and a cruise speed of 120 km/h, which makes it perfect for zero-emission flight operations for a variety of applications in major cities.
Airbus’ long-term earnings growth rate is pegged at 12.4%. Shares of EADSY have returned 29% value to its investors in the past year.
Boeing’s subsidiary, Aurora Flight Sciences, is part of Boeing NeXt, an organization that is leading the safe and responsible introduction of next-generation air vehicles for urban, regional and global mobility. Its passenger air vehicle, or PAV, is a multirotor aircraft designed and developed for Boeing NeXt, which is leading the safe and responsible introduction of on-demand mobility.
Boeing’s long-term earnings growth rate stands at 4%. Boeing shares have increased 24.3% in the past year.
Textron’s business segment, Bell, is working on plans to launch an eVTOL, Bell Nexus. A four-duct vehicle, Bell Nexus 4EX is configurable in an electric or hybrid-electric platform. With a hybrid platform, Nexus 4EX promises an extended reach to travel farther or to more remote locations based on mobility needs. TXT’s other eVTOLs include FCX-001 and Bell AerOS.
Textron boasts a long-term earnings growth rate of 11.7%. TXT stock has appreciated 7.4% in the past year.
Price Movement
In the past year, shares of Embraer have rallied 53.7% against the industry’s decline of 13.1%.
Image Source: Zacks Investment Research
Zacks Rank
Embraer currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Boeing Company (BA) : Free Stock Analysis Report
Embraer-Empresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report
Textron Inc. (TXT) : Free Stock Analysis Report
Airbus Group (EADSY) : Free Stock Analysis Report
