Blue-sky thinking

By one estimate, an Embraer aircraft takes to the skies somewhere in the world every 10 seconds and the firm’s planes carry some 145 million passengers every year. That’s before we take stock of the Brazilian multinational’s defence and security arms, agricultural operations and r&d work.

All of which begs a question: why don’t people know more about the world’s third-largest aerospace firm and Latin America’s biggest defence business as it celebrates its 55th birthday? The man navigating a course for the aviation giant’s commercial operations, Arjan Meijer, isn’t fussed. People who know the industry know us and like the firm, he tells monocle’s editorial director, Tyler Brûlé, at the company’s Amsterdam office, not far from Schiphol Airport.

Here’s what Meijer says when asked about what’s on the horizon, the parts of the industry that are still up in the air and the technology that’s primed for take-off.
— L

Even though we’re sitting in your European HQ, let’s pretend we’re on an Embraer E-Jet E2. We sit down beside each other and start having a conversation. I say, ‘Nice to meet you, what do you do?’ How does Arjan Meijer introduce himself?
Oh, wow. I normally tell people that I work for Embraer. I don’t always immediately say what I do but if they keep asking, then I’ll tell them that I’m responsible for its commercial-aviation business.

And what if they say that they have never heard of the company?
Sometimes they have heard of it and sometimes they haven’t: it’s a mixed bag. If people know the aviation business well, then they’re aware that there are three big brands: Airbus, Boeing and Embraer. If you take the average person who doesn’t know much about the industry, then they will probably have an awareness of the first two brands and be interested in hearing about the third. They become even more interested when you tell them that it originated in Brazil.

How do you talk about this company that comes from the other side of the world? How do you define what it has become?
I love to discuss the business’s history. It was founded in 1969 and started off small, producing the [Embraer emb 120] Brasilía and the [Embraer emb 110] Bandeirante, but quickly progressed onto bigger things. People are amazed when I tell them that we build aircraft with up to 150 seats or when I mention the airlines that we operate with. I also tell them about my experience; the first time that I went to Brazil and saw what Embraer had achieved. When you go to the factory, you realise what a great business it is.

During your previous role at KLM, you had to interact with the plane-makers that are now your competitors. What makes Embraer an interesting company compared to European or American multinational players?
All of the major manufacturers are proud of what they have built. What you really notice when you go to the factory in Brazil, however, is the passion for the product and the way that people share that passion. Embraer allows guests to walk freely around the production floor. You can speak to the engineers and technicians who build the aircraft. It’s an amazing experience to talk to them directly and to feel the love that Brazilians have for constructing these products. Embraer is passionate about what it does but also about being such a hi-tech, Latin American company and bringing opportunities to young people in Brazil.

Is provenance important?
Eventually, yes. Politics plays a big role in our industry. European airlines are looking at European products and US airlines are looking at US products. Over the years, globalisation has opened up the markets. Our products are being used in aircraft around the world. We’re very big in the US, where all the main airlines are serviced by Embraer.

We’re popular in Europe and Canada too, where the E2 is now flying with Porter from Toronto. It’s hard to miss an E2 when you’re in Toronto Pearson Airport. In addition to this, we have always had a large presence in Africa, where we are the second-biggest oem [original equipment manufacturer] after Boeing. There are more than 300 aircraft from our brand flying in the continent alone. Our numbers are also growing in Asia, China and Australia. Airlines know that Embraer builds great-quality products. The fact that the company is based in Latin America instead of, say, Europe or the US doesn’t really matter when you do business in the aviation sector.

Brazil is in an interesting position. It’s in the Americas but feels European in many ways. Does this sort of middle ground benefit Embraer?
Sometimes. But I wouldn’t say that it’s solely because the company is from Latin America. This middle ground is advantageous for us because it sets us apart from other brands. It’s in the best interest of the business world to have competition between multiple strong companies. The aviation industry has garnered a lot of attention over the years. Airlines are keen to talk to Embraer because they are aware of what it has achieved. They are aware that we not only know how to build aircraft but also how to certify them and support customers after they are built.

Does Embraer have a unique advantage because it is now a major player in executive aviation? Does its legacy in building smaller aircraft give it an edge?
Those are great questions. We have three main business units at Embraer: commercial, executive and defence. Then we have a separate unit focusing on service and support. There is hardly any overlap between our customer bases. Some clients might come to us for executive jets for their training business or narrowbody aircraft, such as the E2, for their mainline business but that’s very rare.

Our engineering and operations departments work across the three main business units and this allows us to be innovative with our work. One example that I like to give to illustrate this point is about the E2, which is now in its fourth generation. Before the E2, there was the E1. The second and the third edition of this aircraft emerged from our executive and defence branches. The creation of these models then led to a fourth, improved iteration: the E2. So you can see that engineering develops across the company, which makes for stronger products.

I’m a passenger at Zürich Airport. I’m heading across the tarmac to a plane that belongs to Helvetic or, perhaps, Porter. Does the manufacturer of the aircraft matter? Should passengers know that they’re flying in an Embraer jet?
I don’t think that it’s necessary for passengers to know about the brand that they’re flying with. But there are a couple of strong points that we market as Embraer. One of them is that we have a very spacious cabin and there are no middle seats. You have a little bit of an executive-jet experience when you travel on one of our aircraft. Frequent flyers know and like the Embraer brand.

There were a series of models in the 30- to 50-passenger territory at the Farnborough Air Show this year. Is there a the gap in the market for aircraft of this size now that sustainability is a key focal point in aviation?
The industry has committed to a net-zero co2 output by 2050. Sustainable aviation fuel [saf] is also under development. We know that this is one angle. It’s probably what I’d like to call the “low-hanging fruit”; something that’s achievable with our current engines.

We’re trying to reduce fuel burn in our aircraft from the beginning of the manufacturing process, and to certify saf by the end of the decade. We want to comply with sustainability goals in new technologies, whether they’re electric, hybrid or hydrogen-based.

Is Embraer well positioned to enter this market?
We know that we’ll have to start small. It won’t be possible to build an E2 on batteries or fly purely on hydrogen any time soon. That’s why we established Energia, an experienced team of airlines, suppliers and other aviation experts that advises us on the development of sustainable aircraft. We founded the group for three reasons. First, we wanted to study the application of these new technologies. What would they look like? How would they work in practice? Second we wanted to contact partners that are active in this space. And, third, we wanted to talk to our customers to understand why smaller aircraft have disappeared from the industry over the past 40 to 50 years. Would they make a comeback if we made them more sustainable?

Though we haven’t launched anything in this space yet, we’re talking about it with our partners. It’s important for us to understand whether there’s a viable case for aircraft of this size in the future.

Why do you think that the 30- to 50-passenger aircraft disappeared?
This is a question that continues to crop up in discourse between different aviation companies. Embraer recently created an airline advisory group; some 30 different parties are involved.This segment has probably disappeared as a result of the high unit cost of smaller aircraft. Newer technology fuel requires more money to buy, so exploring this market would be relatively expensive. On the flip side, it could open airlines up to secondary networks, allowing for more point-to-point flights between cities. Some customers might even pay a premium for flying directly from A to B, therefore bypassing major hubs, all while travelling green.

Smaller aircraft represent a largely untapped market. We don’t have an answer as to where we’ll go next in this space but we have laid different scenarios out on the table. It’s something that we’re monitoring closely as we consider the possibilities.

There are very few airline CEOs left who are still visionaries (most are former accountants). How much do you, as Embraer, have to build on your dreams?
There’s always an element of building involved. It starts with concepts. We first need to figure out how an idea could take shape and be economically viable. Those are the first steps whenever we decide to launch a new product. There are many companies around the world that do this but we believe that Embraer is the best at it: we know how to build aircraft, certify products and support our partners.

This process is common when it comes to manufacturing helicopters. It’s something that we adopted when we established Eve Air Mobility, our first product of which will be a vertical takeoff machine for four to six passengers. It will fly a relatively short range – up to 100 km – and come to market in 2026.

Do you see potential for Embraer to further cement its presence in the helicopter space?
Producing more helicopters could help to satisfy the demand for more aircraft in the aviation industry. As we speak, 2,900 evtol [electric vertical takeoff and landing] aircraft are under lois [letters of intent] with customers. There’s a lot of interest in developing this area of the business, which is very promising.

We live in a world where nimbyism is on the rise. Do you think that an increase in the number of people objecting to aviation developments could make it difficult to get them off the ground?
evtols are a very strong proposition, especially for heavily congested cities. Though they are a little noisy, there are many circumstances in which they could prove useful, including transport to events or even airports. Europeans are well known for being sensitive about noise and emissions, so we’ll have to see how something like this could work in a city such as Amsterdam.

We’ll see. Will you stick to manufacturing single-aisle aircraft or move on to widebody models for the commercial business?
There are two questions when it comes to producing widebody aircraft: one, can Embraer do it? And two, will Embraer do it? Airlines are already asking us to get involved in the sector, which is extremely flattering. Some carriers have commented on how well we are performing in terms of not only building aircraft but also delivery and reliability. Making something of this size is not for the faint-hearted but we have proven that we could do it from a technical perspective. Take the c-390 [Millennium], our biggest multipurpose mission aircraft from defence. It’s bigger than a Boeing 737 and has the width of a widebody. The first Embraer aircraft had between 20 and 30 seats, which then increased to 50, 80 and, finally, 150. Larger aircraft are a consideration but we’ll have to see what the future brings.

We’re not far from Schiphol. The airport has been a bit of a flashpoint in the past, with the Dutch government cutting back operations to limit emissions. How much of your time is focused on showing that flying can be a force for good?
It’s something that’s important to me. We need to demonstrate that we can build more sustainable, quieter aircraft. If we have proven anything by the launch of our newest E2-Jet family member, it’s exactly that. We have reduced emissions by more than 25 per cent per seat and the noise profile is about 60 per cent smaller than it used to be. I live under the approach path of Schiphol, so I can hear the aircraft coming over.

So you heard me on the 737 this morning?
[Laughs] Yes. But I also heard the improvements that we’re making as an industry. Compared to the big four-engine aircrafts of the past, the planes flying over are now noticeably quieter.

What do you think about Schiphol’s efforts to cut back operations?
The Netherlands should be proud to have Schiphol. You can’t kill transit traffic and then expect to continue travelling around the globe on a frequent basis. The airport brings huge economic value to the Netherlands, so the discussion [about limiting services] continues to amaze me. klm says that we need to focus on improving the world by reducing the noise and emissions of aircraft. That’s the right way to go.

If you look at the tarmac right now, is any airline a potential customer for you? Or is there a deal that you would love to win?
We have a solid relationship with legacy carriers, which need a variety of aircraft sizes to operate. You need larger aircraft for long routes and smaller aircraft to feed your hub. That’s where our models fit in well. In the US, regional airlines such as Republic and Sky West feed bigger cariers, including United, Delta, American and Alaska. Other operators have a single fleet. And then there are airlines such as Azul in Brazil, which has much more of a local focus.

So does the key to improving carriers’ operations lie in diversifying their fleet?
We have 350 E-Jets flying in Europe. It’s likely that many of those will be replaced by E2s over time. They’re the bread and butter of our business. Porter’s network is solely made up of E2s. In the past, choosing to operate smaller aircraft meant that trips were cheaper but seats were more expensive. With our E2 family, trip costs are still low but seat costs are similar to other models, including Airbus a320s and Boeing 737s. Airlines are starting to see this now.

Single-fleet carriers recognise that E2s work well as a standalone aircraft, which allows them to have a competitive business plan. Porter is a great example of this, as are low-cost carriers that have traditionally leant on 737s or a320s to form the majority of their fleet. We’re coming to a point when adding a second type of aircraft to operators’ fleets could work well for them. This will be one of the biggest points of difference in the market going forward.

I know you’re not supposed to pick favourites but who impresses you? Who do you admire on the airline side?
Well, I don’t like to single out any of my customers too much but there are a couple of examples that come to mind. I have mentioned Porter already and what it is doing outside Toronto is amazing. It started small in Billy Bishop and has launched the new airline from Pearson on a new footing. It’s very successful. I also think of airlines such as Azul in Brazil, which is replacing its E-Jets with E2s. It has told many people that the E2 and a320 Neo have similar seat costs. We love carriers that not only try our models but also tell the world that they really work. It’s even better that our customers have started to recommend the E2 as a complement to widebody fleets.

You’ve highlighted two businesses that broke the mould. Is there potential for the European market to be more daring?
Europe is starting to learn that bigger, narrowbody aircraft aren’t always the most efficient to manufacture or run. The turnaround times are longer and the flying distance in Europe is a little bit shorter. If you speak to major airlines, you’ll learn that they see a lot of potential in smaller planes. Over the next couple of years, many more carriers will be operating with them in their fleets.

How do you envision this change taking place at European airlines? Is there still room for the continent to grow in terms of aviation?
Several discussions are taking place with European airlines about replacing the E-Jet fleet. Many years ago, you might have had, say, a 30:70 mix between your regional jets and E-Jets. Today it makes sense to have more of a balance between the two. That new seat-pricing paradigm shift puts E2s on more of a level playing field with the larger aircraft out there. So there’s a huge opportunity for Europe to grow and adapt to a different business model. This has been embraced with the E-Jets already but E2s will allow the airlines to play that game even better.

Ten quick-fire questions for Arjan Meijer:

Window or aisle?
For me, window.

I’ll give you three hubs. Frankfurt, Paris or Amsterdam?
Amsterdam is my connectivity into the world.

Red or white?
I’ll take the white.

Wifi or a nap?
On a plane, I’ll take a nap.

Props or jets?
Nowadays, I believe in jet, but the future might surprise us.

Long-haul or short?
Short-haul for us, for sure. I do too much long-haul.

Favorite business city? São Paulo aside.
I love Japan, so Tokyo.

Holiday destination of choice?
Of course, somewhere that’s E2 compatible. The French Alps.

First flight or last flight?
First flight.

It’s the football World Cup: Netherlands or Brazil?
Oof. I’ll support the Netherlands. But if we lose, Brazil is my second team.