Plane maker Embraer reports 4th quarter loss, murky future

RIO DE JANEIRO, Brazil – Brazilian plane maker Embraer said Thursday, March 26, the coronavirus pandemic has clouded the aviation industry’s future to the point it is impossible to predict, as it reported a 4th quarter loss and suspended its guidance for the year.

Embraer, the world’s 3rd biggest plane maker after Airbus and Boeing, reported a loss of $209.8 million for the last 3 months of 2019, ending the year with total losses of $322.3 million.

The company said it had delivered 89 commercial jets and 109 executive jets last year, in line with its annual guidance.

But predicting how many planes it will deliver this year has become impossible because of the impact the global health crisis is having on the airline industry, said the company, which has suspended production in Brazil because of the pandemic.

“We’ve found ourselves in very uncertain times with the COVID-19 outbreak,” chief financial officer Antonio Garcia told a conference call, saying quarantines and travel restrictions had upended the industry.

“As soon as we have better visibility…we will release updated guidance to the market.”

Chief executive Francisco Gomes Neto said a number of airlines had contacted the company to discuss deferring pending orders.

However, there have been no orders canceled so far, he underlined.

“The coronavirus epidemic is affecting all the world,” he said.

“Our customers are sharply reducing capacity for domestic and international flights.”

Embraer is in the process of launching a joint venture with United States-based Boeing, which wants to buy an 80% stake in the Brazilian firm’s commercial plane business for $4.2 billion.

The deal is a counterweight to industry leader Airbus’ buyout of Canadian plane maker Bombardier’s commercial aviation business.

Originally scheduled to be finished by the end of last year, the Boeing-Embraer deal has run into delays and is currently awaiting approval by European antitrust regulators.

Boeing, meanwhile, faces growing doubts about its future, as it struggles with both the coronavirus and the crisis surrounding its crash-tainted 737 MAX.

Embraer executives said the deal was moving forward but still awaiting European Union approval.

The company’s shares were down 3.78% in afternoon trading in Sao Paulo, where the Ibovespa index was up around 3.6%.

In 2018, Embraer lost $178.2 million, delivering 90 commercial and 91 executive jets. – Rappler.com