Embraer bumps up estimate for global traffic growth in next two decades

SAO PAULO (Reuters) - Brazilian planemaker Embraer expects global passenger traffic in the next 20 years to grow at a faster pace than it had previously forecast but sees less room for regional aircraft deliveries, it said on Tuesday.

WHY IT'S IMPORTANT

Air travel boomed right after the pandemic but airlines cautioned at the Farnborough Airshow this week that demand has been normalizing as travelers baulk at higher fares while carriers face delivery delays and supply chain constraints.

Embraer is the world's third-largest planemaker and focuses on up-to-150-seat aircraft, sitting just below Airbus' and Boeing's best-selling A320 and 737 families and rivaling the Airbus A220.

KEY QUOTES

"Pandemic aftershocks, like supply chain disruptions, the deceleration of the global economy, and uncertainties from multiple geopolitical conflicts will continue to affect the market," Embraer's commercial aviation head Arjan Meijer said.

"The market sizes and demand patterns are simply too varied to support a fleet strategy focused solely on larger aircraft. We believe an optimal mix of sub-150-seat jets and larger narrowbodies is more conducive to the new environment."

BY THE NUMBERS

Embraer said traffic as measured by revenue passenger kilometers (RPK) should grow at an annual rate of 4% between this year and 2043, above the 3.2% growth it had forecast last year for the 2023-2042 period but still below pre-pandemic.

China and Asia would drive growth in the next two decades with a 5% annual expansion, while Latin America, Europe and North America would post growth of 4.9%, 3.3% and 2.4%, respectively.

Demand for new up-to-150-seat aircraft over the next 20 years was estimated at 10,500, a deceleration from the 11,000 new planes forecast last year. Their market value would total $640 billion.

(Reporting by Gabriel Araujo, Editing by Rosalba O'Brien)