Market analysis by UBS Global Research has raised concerns over the stand-alone prospects for Embraer Executive Jets (EEJ), the business jet division of the Brazilian manufacturer, which is not included in Boeing’s proposed purchase of 80% of Embraer’s commercial aviation business. EEJ has been widely described as a ‘disruptor’ of the corporate jet market and the UBS report questions whether existing sales and profit levels can be maintained when it is separated from the ‘cushion’ provided by the commercial aircraft division.
EEJ delivered 109 corporate jets in 2017 but, the report notes, “Despite the growth in sales, the company has struggled with profitability. The business cannot continue to operate at a loss, especially if the commercial jet business is no longer helping to offset those losses.” It also raised concerns in respect of EEJ’s future market share. “They currently have no significant new products on the horizon,” it said, “and they will not be able to continue to undercut their competitors on price.”