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Sao Jose Dos Campos, SP 12227-901
Phone: 55 12 3927 4404
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Embraer - Empresa Brasileira de Aeronáutica SA - is based in São José dos Campos, Brazil, and was founded in 1969 as a government aerospace initiative and then privatised on 07-Dec-1994. On 31-Mar-2006 the majority of Embraer shareholders approved Embraer’s capital restructuring proposal, which consists of a simplified capital structure composed of one type of shares (common shares).
The Company focuses its activities on three business areas and markets:
- Commercial Aviation;
- Executive Aviation;
- Defense Systems.
Embraer share price
101 total articles
One area where United Airlines has made important strides during the last few years is in overhauling its balance sheet. Its efforts have gained some recognition from credit agencies for its progress in paring down debt and improving leverage ratios; but similarly to its rival American Airlines – attaining an investment-grade credit rating is not a huge priority for United. The airline believes it can achieve some benefits that investment-grade companies enjoy with the current state of its balance sheet.
In order to sustain the progress it has made in balance sheet repair United plans to amend its aircraft order book to slash capex commitments during the next couple of years, including the deferral of 61 Boeing narrowbodies. United is hinting that other fleet changes could be under consideration, including deals similar to the agreement it forged during 2015 to lease used Airbus A319s.
This is Part 2 in a two-part series reviewing United’s financial and revenue-generating opportunities.
During the next couple of years Alaska Air Group faces one of the most important milestones of its 84-year history with the presumed approval and closing of its merger with Virgin America, followed by the complex integration of the two companies.
Alaska has not offered capacity guidance for 2017, but its mainline fleet is projected to grow by just a single aircraft as it completes the phase-out of its Boeing 737-400 Classics. Its regional subsidiary Horizon begins deliveries of Embraer 175s in 2017, which could drive most of the group’s capacity growth for the year. But it is likely that Alaska is aiming to grow total ASMs below 2016’s increase of 8.5%.
As it prepares to close on its acquisition of Virgin America Alaska is continuing its stand-alone network evolution that includes capitalising on loosened operating restrictions at Newark airport, which helps the company bolster its position on the US east coast. Alaska is also targeting more midwestern markets in 2017, one feature of its efforts to diversify its offerings during the last few years.
Panama's Copa Airlines managed to remain profitable in 2015 in what was the most challenging year that the airline had faced in decades. A contracting economy in Latin America, driven by Brazil’s crippling economic weakness, created significant challenges for all airlines operating in the region. Copa posted double digit declines in yields and passenger unit revenues for the year, which helped to erode the benefits of lower fuel costs on the airline’s profitability. Its net income plummeted nearly 49% year-on-year.
Throughout 2015 and into 2016 Copa is making capacity and fleet adjustments to combat the economic realities in Latin America. But the airline is not taking an optimistic view with its passenger unit revenue guidance for 2016, which is lower than 2015’s performance even though Copa anticipates some faint signs of stability emerging in 2H2016.
For now, it seems that all that any Latin American airline can do is attempt to reset their networks in order to diminish their exposure to the weakest areas in the region. Copa is making all the necessary moves to withstand the economic pressure, but in the short term its margins and profits will continue to fall below historical highs.
US airlines Alaska Air Group, jetBlue and Southwest are at different phases of their respective balance sheet fortification and debt management. Alaska and Southwest approach managing their debt with an eye towards maintaining the investment grade status each airline enjoys; Southwest’s status was further bolstered in 2015 with credit upgrades from both Fitch and Moody’s.
Lower fuel prices are allowing most airlines to enjoy healthy levels of free cash flow, and most of those companies believe a portion of those flows should be allotted to paying down debt, and issuing shareholder returns. JetBlue is continuing a trend of enlarging its base of unencumbered assets, which is also a focus for Alaska Air Group. Alaska believes its low leverage levels create a buffer against its competitors that are more leveraged. JetBlue, meanwhile, continues to drive down its leverage ratios significantly.
All of the work to bolster their balance sheets and achieve favourable leverage ratios results in Alaska, Southwest and jetBlue positioning themselves to brace for any weakness created by a cloud of macroeconomic uncertainty underlying demand that, for now, generally remains solid.
Canada’s largest airline Air Canada continues its march to slash unit costs even as the devaluation of the CAD against the USD creates some temporary headwinds for the company. It believes that many opportunities lie ahead to further draw down its costs including a new agreement with regional partner Jazz and the introduction of the Boeing 737 Max beginning in 2017.
The company has revised its 2015 unit cost projections excluding fuel from a 1% to 2% decline year on year to a 1% decrease, driven by several factors, including currency pressure. Absent the depreciation of the CAD, Air Canada maintains its unit cost decreases would be greater year on year for 2015.
Given its complexity, Air Canada’s cost on an absolute basis will likely never equal that of its main rival WestJet; but keeping fuel and currency costs constant, the airline remains confident of lowering its unit costs by 21% between 2012 and 2018,. Air Canada's fleet strategy and the continued favourable performance of its low cost subsidiary rouge are major components of its cost cutting strategy.
Although Latin America has suffered from challenging economic conditions throughout 2015 that are lingering into 2016, some interesting developments have occurred between Mexico and South and Central America. Mexican airline Volaris during 2015 has branched out its international offering beyond US transborder routes to Central America, and Aeromexico and Avianca have added routes between Mexico and South America.
Copa Airlines has also added two new destinations in Mexico as it redirects capacity from battered Brazil to routes whose revenue potential is more promising. Although it is facing currency weakness similar to other Latin American economies, Mexico’s economic climate is more healthy than most countries in South America.
LATAM Airlines Group is also strengthening its ties in Mexico with a new codesharing agreement with Interjet, which has a solid domestic network. The pact shows that Latin America’s second largest aviation market, Mexico, remains one of the region’s strategic areas going forward.