U.S. markets closed
  • S&P 500

    +33.11 (+0.75%)
  • Dow 30

    +382.20 (+1.09%)
  • Nasdaq

    +73.91 (+0.50%)
  • Russell 2000

    -8.52 (-0.37%)
  • Crude Oil

    +1.35 (+1.66%)
  • Gold

    -29.80 (-1.66%)
  • Silver

    -0.13 (-0.54%)

    +0.0005 (+0.05%)
  • 10-Yr Bond

    +0.0570 (+3.75%)

    +0.0074 (+0.54%)

    +0.5230 (+0.46%)

    -370.94 (-0.60%)
  • CMC Crypto 200

    +57.32 (+4.07%)
  • FTSE 100

    +26.32 (+0.37%)
  • Nikkei 225

    +517.70 (+1.81%)

Embraer SA (ERJ) Gets Porter Airlines' Order of E195-E2 Jets

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

Embraer SA ERJ wins order for 30 E195-E2 jets and an option for another 50 from Porter Airlines of worth $5.82 billion based on current list prices. The longer range of E195-E2 jets will give Porter the right to introduce nonstop services in the markets where there is no current direct service or even increase frequencies on high-demand routes.

With this deal, Porter becomes Embraer's first North American customer for the E2 line. The jets are expected to go in service in the second half of 2022.

Company’s Order Status

Embraer continues to witness strong market demand for its E-jets across the globe. The E2 is the second generation of the E-jets family of commercial aircraft. As of Mar 31, 2021, Embraer’s E-Jets E2 had 175 orders in backlog while 86 aircraft were already delivered to customers worldwide.

To further expand its commercial aircraft business, the company is investing significantly. During the first quarter, it invested a total of $24.5 million in product development, principally related to the development of the E-Jets E2 commercial jet program. Such investments are expected to boost the sale of Embraer’s E-jets to airlines as demand for air travel is witnessing some improvement.

Aviation Industry Trend

The year 2020 and the first few months of 2021 negatively impacted the aviation industry due to lockdowns and restrictions imposed on travel. Per the International Civil Aviation Organization (ICAO), 2020 saw a 60% decline in international passenger traffic from the 2003 levels. The metric is not expected to return to the 2019 levels until 2024.

Much to one’s relief, there is relaxation in COVID-related restrictions with the rollout of vaccines. This reflects a ray of hope for the travel industry. Per IATA, in the ongoing year, global passenger record is likely to recover to 52% of the pre-COVID levels.

Although the pandemic has its share of negatives, it opened various opportunities for the airline operators. The companies were looking to acquire planes before COVID-19 had struck but unfavorable rates did not permit them. The crisis situation helped buying planes at reduced prices, thereby expanding businesses.

This June, United Airlines Holdings UAL announced the largest aircraft order in its history as the carrier ramps up its operations to cater to the uptick in air-travel demand. The airline decided to purchase 200 737 MAX from The Boeing Company BA and 70 A321neo jets from Airbus Group EADSY while replacing the older, smaller mainline and regional jets with larger aircraft.

Zacks Rank & Price Performance

Shares of this currently Zacks Rank #3 (Hold) company have rallied 32.8%, outperforming the industry's growth of 2.2% in the past three months. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Three Months Price Performance

Zacks Investment Research
Zacks Investment Research

Image Source: Zacks Investment Research

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

EmbraerEmpresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report

United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

Airbus Group (EADSY) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research