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Boeing's Embraer blames failed for sharp drop in commercial jet deliveries

Image:- Embraer

Planemaker Embraer said on Tuesday that its commercial jet deliveries fell by more than half in the first three months of 2020 compared to a year ago, blaming the drop on preparations for its failed Boeing Co deal.

As a factor, Embraer had not mentioned coronavirus.

Embraer hoped that the planned takeover of its commercial aircraft division by Boeing would bring much-needed marketing power to its mid-size E2 jets, which were praised for their fuel efficiency but lagged behind in sales. But, in disputed circumstances, Boeing pulled out of the deal last month.

The numbers are the first glimpse into what's at stake for the No. 3 planemaker worldwide as it faces an unclear future without Boeing. Analysts are afraid it will struggle to compete with Boeing-Airbus' ever-strengthening duopoly.

The results seem to include some order cancellations, something that all planemakers have been struggling with since the coronavirus pandemic brought the air travel industry to a complete halt starting in March's last two weeks.

Firm orders for the top selling plane of Embraer-the E175, which sits up to 90 people-fell by 15 jets, not counting the planes delivered in the period. Including more flexible so-called "options" which fell with 15 jets as well.

The order pipeline for the jet lies at 456 overall.

Orders remained the same for Embraer's other commercial aeroplane models.

Embraer did not have any immediate comment about the apparent cancellations.

The numbers of Embraer were low even considering it was the first quarter of the year, usually the slowest. In a filing with securities. The company delivered 11 commercial jets in 2019, and 14 commercial jets in 2018.

It said deliveries had been "negatively impacted" by the completion of the January carve-out process to get Boeing all ready to close the purchase.

In January, Embraer sent its workers home for two weeks to prepare for the Boeing takeover and suspended production.

The company said its backlog, a gauge of future revenue, was $15.9bn, compared to $16.8bn three months ago.

Executive jets also fell slightly from 11 a year ago, to 9 deliveries.

Article Edited by | John Heine |

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