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Regional airline KLM Cityhopper has kind words but no orders for Embraer's E2

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Regional airline KLM Cityhopper has kind words but no orders for Embraer's E2

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SAO PAULO (Reuters) – The top executive at the biggest European operator of Embraer <EMBR3.SA> passenger jets took a close look at the planemaker’s next-generation aircraft on Wednesday, but said it is too early to think about placing an order. Warner Rootliep, the managing director of regional airline KLM Cityhopper, a unit of Air France KLM SA <AIRF.PA>, said in an interview that he and his team were “very impressed” with the E190-E2 that they saw at Embraer’s headquarters in Brazil. “Embraer colleagues were kind enough to roll out the E2, and we had a very close look at it … It looks very promising,” he told Reuters, during his first visit to Brazil since taking his new role last month. “In due time, the E2 could be a nice addition, but I think that it’s a bit too early.” With a 40-aircraft fleet made up exclusively of Embraer E-Jets and eight more on order, KLM Cityhopper is the sort of happy customer that Embraer is targeting with the re-engined E2 lineup that enters service starting in April with the E190-E2. Yet KLM’s backlog of orders for current-generation jets underscores the challenge of selling and producing two overlapping families of aircraft over the next four years. Embraer warned last month that profit margins are likely to suffer next year as it ramps up E2 production. John Slattery, the head of Embraer’s commercial aviation unit, said in a joint interview that part of the planemaker’s plan was to stimulate new demand from flagship European airlines with a longer version of its largest aircraft, the E195-E2. That passenger jet, Embraer’s biggest ever, enters service in 2019 targeting the same market as Bombardier’s <BBDb.TO> CSeries, which got a boost last month when Airbus SE <AIR.PA> took a majority stake in the programme. At the smaller end of Embraer’s line-up, Rootliep said KLM had taken part in the Brazilian planemaker’s recent advisory board to discuss a possible entrant into the turboprop market now dominated by ATR, a joint venture between Airbus and Italian company Leonardo SpA <LDOF.MI>. Slattery said the board gathered representatives from 22 global airlines and two leasing companies for conversations in Amsterdam, but stressed that it was part of a standard exploratory process rather than a signal of development plans. “Embraer is always running the ruler over the natural franchise footprint that we have, which is everything below 150 seats,” Slattery said.

(Reporting by Brad Haynes; Editing by Lisa Shumaker)
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