Embraer Day NY - Aviação Comercial

Mauro Kern
Executive Vice President

Commercial Aviation
Airline Market Overview

A perspective from the 30 to 120-seat segment
The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent
Forward Looking Statement
This presentation includes forward-looking statements or statements about events or

circumstances which have not occurred. We have based these forward-looking statements
largely on our current expectations and projections about future events and financial trends
affecting our business and our future financial performance. These forward-looking
statements are subject to risks, uncertainties and assumptions, including, among other
things: general economic, political and business conditions, both in Brazil and in our
market.
The words “believes,” “may,” “will,” “estimates,” “continues,” “anticipates,” “intends,”
“expects” and similar words are intended to identify forward-looking statements. We
undertake no obligations to update publicly or revise any forward-looking statements
because of new information, future events or other factors. In light of these risks and
uncertainties, the forward-looking events and circumstances discussed in this presentation
might not occur. Our actual results could differ substantially from those anticipated in our
forward-looking statements.
Contents
Air Transport Industry Review
50-seat Regional Jet Market & the ERJ145 Family
70 to 120-seat Jet Market & the E-Jets
Competitive Scenario
Embraer Market Forecast
Air Travel Demand Remains Growing
World Air Travel Demand
5.0
4.5
RPK (in Trillion)
4.0
3.5
3.0
2.5
2000
2001
2002
2003
2004
2005
2006
2007
2008F
YoY RPK (%) 8.6 -2.4 -0.3 1.4 14.9 8.0 5.6 6.6 5.6
Source: ICAO
LCCs Putting Pressure on Fares
LCCs fleet and presence doubled since 2000
LCC Presence:
2000
2007
Fleet in Service Backlog Airports Served
2000 2007 % 2007 2000 2007
LCC 1,405 2,882 105% 2,120 437 974

Network 7,832 8,505 9% 2,997
Source: BACK (Dec/07)

Liberalization is Already Happening
Many new airlines have started operations since Jan/06
Africa Latin America

3 Start-ups 4 Start-ups
Asia Pacific Middle East

China North America

Europe Russia / CIS

Source: BACK (Dec/07 ; Number of Start-ups = New Airlines – Dead Airlines)

World Yields Remain Weak
World Nominal Yield
5
Forecast
4
2
YoY Growth (%)
-1
-2
-3
-4
-5
1995 1997 1999 2001 2003 2005 2007 2009F 2011F
• Strong yield environment in 2007, allowing revenues to offset fuel costs.

• Positive trend likely to disappear in 2008, substantial efficiency improvements
will be required.
Source: IATA
High Fuel Price will Stay
Crude Oil Price (US$ per barrel) 06Mar08 Jet Fuel Price Forecast (US$ per Gallon; EIA)
3.00
WTI: 105.47
2.51
2.50 2.38
Jet Fuel Price (US$ per Gallon) 04Mar08 2.00
New York: 2.97

1.50
Rotterdam: 2.99
1.00
China*: 2.74
0.50
Singapore: 2.82
0.00
Brazil*: 3.37 2008 2009
Source: EIA (Feb/08) * Prices as of 31Dec07

Airline´s Ability to Deal With Rising Costs
Fuel cost is rising but Fuel efficiency is increasing
Fuel Expenses (% of Total Expenses) Fuel Consumption per Passenger (Gallon)

35 40
+ 164% - 10% - 17% - 7%
38
30
36
25
34
20
32
15
30
10
28
Historic Forecast Historic Forecast
5 26
1995
1997
1999
2001
2003
2005
2007
1995
1997
1999
2001
2003
2005
2007
2009F
2011F
2009F
2011F
Source: IATA (Dec/07)
Old Fleet Means Extra Operating Costs
Around 650 jets (30-120 seats) with more than 25 years of age need
urgent replacement
# Acft Avg. Age
B727-200
62 30
Fleet by # Acft. Avg.
Region (TP+Jet) Age
Africa 711 16 B737-200
204 28
Asia Pacific 2,822 11
China 1,261 7
DC 9-30
Europe 4,150 10 110 37
Latin America 1,277 15
Middle East 617 10 AN-24

205 37
North America 7,025 11
Russia & CIS 1,282 23 TU-134

135 31
World 19,145 12
YAK- 40
199 33
Source: BACK (Dec/07 ; Scheduled Airlines)

Efficiency is the Name of the Game
World
Average Industry Load Factor Average Industry Utilization (Flight hours/day)
80% 10.0
+ 9.5 pp
78% + 20%
9.5
76%
9.0
74%
72% 8.5
70% 8.0
68% 7.5
66% 7.0
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
• Record load factors helped airlines offset costs increases since 2000
• World airlines moving aggressively to redeploy assets and adjust aircraft
utilization
Source: ACAS (Nov/07)

Positive Net Results Projected for 2007 & 2008
North America
-10 -6.7 -2.7 2.7 2.2
Europe
World
1.1 1.6 1.8 2.1 2.0
-5.6 -4.1 -0.5 5.6 5.0
2004 05 06 07F 08F
Middle East
0.2 0.2 0.2 0.2 0.2
2004 05 06 07F 08F

Asia Pacific
2004 05 06 07F 08F
3.4 1.2 0.8 0.7 0.6
Africa
Latin America
-0.3 -0.4 -0.4 -0.1 -0.1 2004 05 06 07F 08F
0.1 -0.1 -0.2 -0.1 0.0
2004 05 06 07F 08F
2004 05 06 07F 08F 2004 05 06 07F 08F
Values in US$ Billion

US net results includes restructuring costs and
Source: IATA Economics Dec/07 (ICAO data to 2006 and IATA Forecast 2007-2008) excludes United Airlines ‘fresh-start’ accounting losses and gains
ERJ 145 Family
RJ50s Current Situation
ROW
8%
CIS
9%
Worldwide Fleet in Service (Dec/07): Europe

13%
2050 aircraft
USA
70%
Parked
2%
Parked aircraft: 20 CRJs; 1 ERJ; 13 others

only 2% of the total fleet – a stable market In
Service
98%
RJ50s: responsible for nearly 30% of US domestic departures and the most
important hub-and-spoke system enabler
Source: BACK (Dec/07; FIS=Scheduled airlines and A/C active in service)

ERJ 145 Family Order Book
Firm Firm
Options Deliveries
Orders Backlog
ERJ 135 108 - 108 -
ERJ 140 74 - 74 -
ERJ 145 733 131 687 46
Total 915 131 869 46
(December 31st. 2007)

1,000 ERJ145 Platforms Already Delivered
Dec
Dec 1996
1996
First
First Delivery
Delivery
Dec
Dec 1998
1998
Dec
Dec 1999
1999
Aug
Aug 2000
2000
September, 2007
Mar
Mar 2001
2001 Sep
Sep 2001
2001 May
May 2002
2002 May
May 2003
2003 May
May 2004
2004 Feb
Feb 2005
2005
RJ50 Evolution on Non-Traditional Markets
´s RJ fleet grew in three years to 44 aircraft from just 5
Mexico´
2004 2007
RJ50 ERJ145 RJ50 ERJ145

# Aircraft 5 5 # Aircraft 44 27
Markets 18 18 Markets 106 78
Av. Stage Length 405 nm 405 nm Av. Stage Length 362 nm 369 nm
Source: BACK (Dec/2007), RJ50 includes ERJ145 and CRJ100/200/440

RJ50 Evolution on Non-Traditional Markets
´s RJ aviation is growing at slower pace but has huge potential
China´
2003 2006
196 Markets - 45 A/C 223 Markets - 61 A/C

11%
China
33% 30-120 Seats

Europe
unbalanced jet fleet 120-210 Seats
42%
USA
Source: CAAC % of Fleet

0% 20% 40% 60% 80% 100%
RJ50s Future Market Trends
• Market entered a mature phase in the US and Europe
• RJ50s will remain the backbone of US hub feeding system
• Some new market opportunities (long and thin) in the US and EU
• Potential for regional aviation development in China and Russia
• Secondary markets will keep expanding
E-Jets Family
… an efficiency tool!
E-Jets Family
EMBRAER 170/175
EMBRAER 170
• 70 to 80 Seats
• 2,100 nm Range
• Certification – February 2004
EMBRAER 175
• 78 to 88 Seats
• 2,000 nm Range
• Certification – December 2004
EMBRAER 190/195
EMBRAER 190
• 98 to 114 Seats
• 2,400 nm Range
• Certification – August 2005
EMBRAER 195
• 108 to 122 Seats
• 2,200 nm Range
• Certification – June 2006
E-Jets Family Order Book
Firm Firm
Options Deliveries
Orders Backlog
EMBRAER 170 170 127 139 31
EMBRAER 175 129 148 59 70
EMBRAER 190 405 452 123 282
EMBRAER 195 60 59 13 47
Total 764 786 334 430

(December 31st. 2007)
E-Jets Deployment - North America
Dec/07 Deliveries Backlog

15 E175
3 E190
42 E190
30 E190 71 E190
9 E175 27 E175
11 E190 46 E190
76 E170
29 E175
25 E175
Natural Growth Right-sizing
Direct Replacement New Markets
27% 51% 8% 14%
E-Jets 208 176
0% 20% 40% 60% 80% 100%
Source: BACK (4Q07), Embraer
E-Jets Complementing Narrowbodies
Toronto - Halifax Charlotte – Toronto

2007 2008 2007 2008
Seats* 1,033 992 318 436
6:00 A319 A319
A320 E190
8:00 E190 CRJ-200
A320 E170
10:00 A320
A319
12:00 A320 A319
A320 737-300
14:00 737-300
A319
16:00
E190 E175
18:00 A320
20:00 A320
E190 737-300
22:00 737-400
Source: BACK (4Q06) *4th Wednesday of January

E-Jets Interchanged with Narrowbodies
New York - Portland Denver -

Montreal
Apr/06 Apr/06
Spring Summer Fall Winter Spring Summer Fall Winter
Spring Summer Fall Winter Spring Summer Fall Winter
E-Jets Narrowbodies
E-Jets provide year-round network coverage, optimizing fleet

capacity to seasonal market demand
Source: BACK
E-Jets Deployment - Europe
6 E170
10 E195
2 E170
10 E170
4 E190
6 E190
5 E190
8 E195 6 E195
10 E190
10 E170
6 E175
30 E190
Natural Growth Right-sizing 2 E195

Direct Replacement New Markets 6 E170
5 E190
42% 43% 7% 8% 5 E190
E-Jets 53 78
0% 20% 40% 60% 80% 100%
E170/190 at Finnair: Replacing/Complementing NBs
Helsinki - Gothenburg Helsinki - Dusseldorf Helsinki - Warsaw
2006 2007 2008 2006 2007 2008 2006 2007 2008
Seats Oferred 126 202 304 126 226 278 76 202 252
6:00
E170 E170
8:00 A319 E170 E170
E170 A319
10:00
A319
12:00 E170 E170
14:00
16:00 E170 A320 A319

E170 E190
18:00 A319 E170
E170
20:00 E170
22:00
Midnight
E-Jets right-sizing at Finnair: 76% of E170/190 markets

18 markets complementing A319/320s
11 markets replacing A319/320s and MD-80s
Source: BACK (Jan/08) *4th Wednesday of January
E-Jets Deployment - Asia Pacific & China
50 E190
3 E170
3 E170
14 E190
10 E170
4 E190
3 E190
1 E195
2 E170
3 E175
2 E170
1 E170 1 E190
Right-sizing Direct Replacement New Markets

1 E170
5% 20% 75%
E-Jets 13 85
0% 20% 40% 60% 80% 100%
Source: Back (4Q07), Embraer

Comparison: Fuel Burn / CO2 Emissions
The E-Jets Family offers substantial fleet renewal benefits with fuel /
emission reductions up to 50%.
Fuel Burn*: 61 to 90-seat segment

160%
140%
120% +53%
100%
80%
60%
40%
20%
0%
E170 E175 BAe 146- BAe 146- F70 RJ85 DC9-10
100 200
* 500 nm sector, 100% Load Factor

E170/175 Fuel Savings Comparison with Older Jets
E170/175 can offer up to US$ 1.8 million yearly fuel savings
$2,000
BAe 146-200
Additional Annual Fuel Cost (US$ -
Avro RJ85
DC9-10
BAe 146-100
$1,500
thousands) vs. E170
F70
$1,000
$500
E175
$0 E170
0% 10% 20% 30% 40% 50% 60%
Addtional Fuel Burn vs. E170
500 nm Sector, Full Pax, Network Environment (3,200 annual BH), Jet Fuel Price $2.50/gallon
Comparison: Fuel Burn / CO2 Emissions
The E-Jets Family offers substantial fleet renewal benefits with fuel /
emission reductions up to 50%.
160%
Fuel Burn*: 91 to 120-seat segment
140%
+50%
120%
100%
80%
60%
40%
20%
0%
E190 E195 B717 B737- B737- B737- F100 MD87 RJ100 DC9-30
200 300 500
* 500 nm sector, 100% Load Factor

E190/195 Fuel Savings Comparison with Older Jets
E190/195 can offer up to US$ 2.1 million yearly fuel savings
$2,500
Additional Annual Fuel Cost (US$ -
DC9-30
MD87
$2,000 737-200
thousands) vs. E190
737-400
$1,500
737-300 Avro RJ100
$1,000 737-500
F100
$500 717
E195
$0
E190
0% 10% 20% 30% 40% 50% 60%
Additional Fuel Burn vs. E190
500 nm Sector, Full Pax, Network Environment (3,200 annual BH), Jet Fuel Price $2.50/gallon
Air Canada – Merrill Lynch Global Transportation Conference (Jun/2007)
Domestic
International
OPY
C
E-Jets Deployment
Natural Growth Direct Replacement Right-sizing New Markets
100%
% of Total E-Jets Markets
14% 8% 15%
80%
42%
60% 51% 53%
7%
40%
8% 6%
20% 42%
27% 26%
0%
North America Europe World
• 53% of E-Jets operations: right-sizing of narrowbody services

E-Jets Customer Base Evolution
Customers/
Operators 1 2 3 4 9 14 19 29 44
800 764
700
619
600
Accumulated Firm Orders
500 440
400 343
300 245
200
110 112 118
100
60
0
1999 2000 2001 2002 2003 2004 2005 2006 2007
Deliveries
Source: Embraer
E-Jets Worldwide Distribution
Customers Firm Orders

Asia Pacific /
China
18% Middle East / 13%

18% Africa
7%
Europe 51%
18% 18%
20%
28% Latin America
9%
North America
Growing and diversified customer-base across five continents.

Increased presence in emerging markets with established carriers.
Source: Embraer (Dec/07)
E-Jets Family - Efficiency to all Business Models
Regional Network Low Cost
Charter
Source: Embraer (Dec/07 ; Sirte Oil and GECAS not presented)

70 to 120-seat Future Market Trends
REGIONAL
Traffic growth on high load factor RJ50 routes
Mainline service level on regional routes

NETWORK
Right-sizing of low load factor narrow-body flights
Replacement of old and inefficient jets

LOW COST
Expansion into medium density markets
Competitive Scenario: ARJ21 and SSJ100
ARJ21-700 Program • First flight: March/2008 (TBC)
• EIS: 2009
Competition • ARJ21-700 (90 pax): E175 (86 pax)
• Mostly restricted to China and
surrounding countries
Orderbook • 121 aircraft (ARJ-21), 100% in China
SSJ100 Program • First flight delayed to April-June/2008

• EIS: 2009
Competition • SSJ100/95 (95 pax): E190 (100 pax)
• SSJ100/75 (78 pax): E175 (82 pax)
• Mostly in CIS and Eastern Europe
Orderbook • 88 aircraft, 78 in Russia + 10 in Italy

(start-up airline)
Competitive Scenario: MRJ and CSeries
MRJ 70/90 Program • Launch: March/08
• EIS: 2012/2013
Competition • MRJ 70 (76 pax): E170 (80 pax)
• MRJ 90 (88 pax): E175 (88 pax)
• Initially restricted to Japan. Will have
to prove itself locally before
competing in the worldwide market.
Orderbook None
CSeries Program • ATO: Feb/08

• EIS: 2013 (earliest)
• Program cost incresed: $1bi to $3.2bi
Competition • C110 (110 pax): E195 (110 pax)
• C130 (130 pax): A319/737-700
• Worldwide. Project not optimized for
short-mid range trips.
Orderbook None
Market Share - World (30-120 seats)
Embraer: ERJ 145/140/135 ; Embraer 170/175/190/195
80 Bombardier: CRJ100/200/440/700/900/1000
Airbus: A318
Boeing: B737-600
AVIC I: ARJ-21
70
Sukhoi: Superjet 100
Antonov: An-148
60 59
51 52 51
52 50 50 50
50 48 47 47 46
47 44 45 45
42 42
38 45 44
44 44 43
(%)
40
38 34
37
30
24
20 23
11 14
10 8
5 8
5 4 3 3 3
33 2 2 2
8
4 2 2 2
2 2
0 4 4 3 2 1 1 1 1 1
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Feb/08
Projected Economic and Traffic Growth
Growth by Region (2008-2027)
GDP
RPK
2.7% 4.0% 2.1% 4.5% 4.1% 5.4%

North Europe Russia / CIS
America
7.0% 7.5%
China
3.2% 4.9%
World
4.2% 6.2%
Middle East
4.0% 6.1% 4.8% 5.4% 2.7% 5.3%

Latin America Africa Asia Pacific
Projected world GDP growth around 3% in the next twenty years

sustaining nearly 5% annual increase in air transport demand
Source: Global Insight and Embraer (Dec/07)
Embraer Market Forecast (2008-2027)
Projected Deliveries - Jets
Market Segment (Seats) 2008 – 2017 2018 - 2027 2008 - 2027
30 - 60 275 825 1,100

61 - 90 1,075 1,525 2,600
91 - 120 1,800 1,950 3,750
30 - 120 3,150 4,300 7,450
Main Drivers
30-60 Mature market, low 50-seat demand in the short/mid term.
61-90 75-seater as a natural growth of RJ50s.
Right-sizing of narrowbody operations, replacement of old & inefficient
91-120
jets and airline expansion into mid-density markets.
Embraer Market Forecast (2008-2027)
7,450 new jets in the 30 to 120-seat segment
Russia /
CIS
Europe
North 510
America 1,350 7%
3,330 17%
45% China
Middle
730
Africa East 10%
220 190
3% 3% Asia
Latin
Pacific
America
580 540
7%
8%
E-Jets Around the World
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Mauro Kern

Executive Vice President

Airline Market Overview

This presentation includes forward-looking statements or statements about events or

Air Transport Industry Review

50-seat Regional Jet Market & the ERJ145 Family

70 to 120-seat Jet Market & the E-Jets

Embraer Market Forecast

LCC 1,405 2,882 105% 2,120 437 974

Source: BACK (Dec/07)

Africa Latin America

Asia Pacific Middle East

China North America

Europe Russia / CIS

Source: BACK (Dec/07 ; Number of Start-ups = New Airlines – Dead Airlines)

• Strong yield environment in 2007, allowing revenues to offset fuel costs.

Jet Fuel Price (US$ per Gallon) 04Mar08 2.00

New York: 2.97

Source: EIA (Feb/08) * Prices as of 31Dec07

Fuel cost is rising but Fuel efficiency is increasing

Fuel Expenses (% of Total Expenses) Fuel Consumption per Passenger (Gallon)

Latin America 1,277 15

Middle East 617 10 AN-24

Russia & CIS 1,282 23 TU-134

Source: BACK (Dec/07 ; Scheduled Airlines)

Average Industry Load Factor Average Industry Utilization (Flight hours/day)

Source: ACAS (Nov/07)

2004 05 06 07F 08F

2004 05 06 07F 08F

2004 05 06 07F 08F 2004 05 06 07F 08F

Values in US$ Billion

Worldwide Fleet in Service (Dec/07): Europe

Parked aircraft: 20 CRJs; 1 ERJ; 13 others

Source: BACK (Dec/07; FIS=Scheduled airlines and A/C active in service)

Total 915 131 869 46

(December 31st. 2007)

RJ50 ERJ145 RJ50 ERJ145

Source: BACK (Dec/2007), RJ50 includes ERJ145 and CRJ100/200/440

196 Markets - 45 A/C 223 Markets - 61 A/C

33% 30-120 Seats

Source: CAAC % of Fleet

• Market entered a mature phase in the US and Europe

• RJ50s will remain the backbone of US hub feeding system

• Some new market opportunities (long and thin) in the US and EU

• Potential for regional aviation development in China and Russia

• Secondary markets will keep expanding

Total 764 786 334 430

Dec/07 Deliveries Backlog

Toronto - Halifax Charlotte – Toronto

Source: BACK (4Q06) *4th Wednesday of January

New York - Portland Denver -

E-Jets provide year-round network coverage, optimizing fleet

Natural Growth Right-sizing 2 E195

16:00 E170 A320 A319

E-Jets right-sizing at Finnair: 76% of E170/190 markets

Dec/07 Deliveries Backlog

Right-sizing Direct Replacement New Markets

Source: Back (4Q07), Embraer

Fuel Burn*: 61 to 90-seat segment

* 500 nm sector, 100% Load Factor

* 500 nm sector, 100% Load Factor

Natural Growth Direct Replacement Right-sizing New Markets

• 53% of E-Jets operations: right-sizing of narrowbody services

Source: BACK (4Q07), Embraer