Embraer S.A. ( ERJ Quick Quote ERJ - Free Report) recently announced the expansion of its partnership with CAE Inc. ( CAE Quick Quote CAE - Free Report) to promote pilot training services for the Embraer E-Jet E2 family of commercial aircraft. The latest joint venture (JV), announced at the 2023 Asia Pacific Airline Training Symposium, should further strengthen Embraer’s position in the commercial aerospace industry. Benefits of the Program
Embraer-CAE Training Services (ECTS), built through this JV, includes the provision of pilot and cabin crew training for E-Jet E2 family of jets. The ECTS plans to launch a new pilot training program in December 2023. For this, Embraer will deploy a state-of-the-art E-Jet E2 full-flight simulator (FFS) at the Singapore-CAE Flight Training Centre.
The training program will also include CAE 7000XR Series FFSs, including the innovative CAE Tropos 6000XR visual system, as well as CAE XR Series' flight training devices. Notably, to reap the benefits of the expanding E-Jet E2 fleet in the Asia Pacific region, Embraer made the initial launch of the ECTS in Singapore. Considering the fact that the E-Jet services and support are available to more than 940 customers in 70 countries, we may expect ECTS to become available in other parts of the world in the coming years. This, in turn, will boost growth prospects for both Embraer and CAE. Embraer’s Prospects in Commercial Aerospace
Per the International Air Transport Association’s report, published in June 2023, the first half of 2023 saw a 47.2% increase in global revenue passenger kilometers (RPKs) year over year. The demand for air travel is expected to double by 2040, growing at an annual average rate of 3.4%.
Such abounding prospects in the air travel business should boost the growth of Embraer’s commercial aviation business. Notably, in August 2023, the company was awarded the Type Certificate by the Civil Aviation Administration of China for its E195-E2 jets, soon after receiving Type Certification from the Civil Aviation Authority of Malaysia for its E190-E2 and E195-E2. Such developments, along with the company’s latest tie-up with CAE, should enable Embraer to duly reap the benefits of the growing commercial aerospace industry. Peer Moves
Apart from Embraer, aircraft manufacturers in the commercial aviation industry that may gain from the flourishing air travel demand are as follows:
Boeing ( BA Quick Quote BA - Free Report) : In second-quarter 2023, Boeing delivered 136 commercial airplanes and received 460 net orders. With the new airplanes, which are yet to be delivered, expected to be 25% to 40% more fuel efficient with greater emission reductions than the airplanes they replace, the company should benefit from the trending demand trail. BA boasts a long-term earnings growth rate of 4%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 19.3% from the 2022 reported figure. Airbus ( EADSY Quick Quote EADSY - Free Report) : In first-half 2023, Airbus delivered 316 commercial aircraft. In August 2023, Wizz Air signed a contract for an additional 75 A321neo Family aircraft, taking its total order for the largest member of the Airbus single-aisle to 434 EADSY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2023 sales implies an improvement of 17.8% from the 2022 reported figure. Price Performance
In the past six months, shares of ERJ have gained 22.2% against the
industry’s 7.3% decline. Image Source: Zacks Investment Research Zacks Rank
Embraer currently has a Zacks Rank #3 (Hold). You can see
. the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here