Mauro Kern

Executive Vice-President Airline Market

Airline Market Overview
A perspective from the 30 to 120-seat segment
Mar/2010

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 forwardlooking 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.

The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent

Contents

Air Transport Industry Review ERJ 145 Family E-Jets Family Competitive Scenario Product Development Market Outlook 2010-2019
The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent

Economic Scenario
World Real GDP Evolution (USD 2005)
60

55
Real GDP (US$ trillions)

50

45

40

35 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009F 2010F 2011F 2012F 2013F 2014F

World will return to pre-crisis level in 2010 (due to emerging countries) USA and Europe will recover in 2011-12
Source: The Economist (Feb/10)
The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent

Air Transport Demand - IATA
World – International RPK Growth Rate (% yoy)
12 10 8 6 4 2 0 -2 -4 -6 -8 -10 -12 -14
Jan-06 Mar-06

5.9%
May-06 May-07 Jul-06 Jan-07 Mar-07 Sep-06 Nov-06

7.4%
Jul-07 Jan-08 Mar-08 Sep-07 Nov-07

1.6 %
May-08 May-09 Jul-08 Jan-09 Sep-08 Mar-09 Nov-08

-3.5%
Jul-09 Sep-09 Nov-09 Jan-10

IATA: “The industry starts 2010 with some enormous challenges. The worst is behind us, but it is not time to celebrate.”
Source: IATA (Jan/10)
The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent

1 4.2 6.3 -3.5 6.0 5.1 -4.8 1.4 5.5 3.1 2006 2007 2008 2009 F 2010 F 2011 F 2012 F 2009: Reduced demand due to economic crisis 2010-2013: Projected demand recovery Source: IATA and ICAO (Dec/09) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent 2013 F .Demand Forecast – IATA and ICAO RPK Growth Rate (% yoy) IATA ICAO 7.3 5.

Air Transport Industry Review – a summary Gradual recovery of market demand Weak revenue environment.8bi) Continuous efficiency improvement and cost reductions Limited aircraft financing resources More consolidations & mergers and fewer start-ups Long term growth in air transport demand despite current crisis The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent . signs of improvement (IATA halved its loss forecast for 2010 to US$2.

9% Regional: +13.Air Transport Demand – US Mainline vs.2% cagr FAA Aviation Forecast RPM cagr Mainline Carriers Regional Carriers 20092030F +2. Regionals US Domestic 600 500 RPM (Billion) 400 300 200 Mainline: -0.3% cagr 100 +4.2% 0 20 00 20 01 20 02 20 03 20 04 20 05 20 06 20 07 20 08 20 09 E 20 10 F 20 11 F FAA Forecast (Mar2010): Source: FAA higher growth rates for Regionals increased use of 70-90 regional jet aircraft The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

100 ERJ145 Platforms Already Delivered Dec 1996 Dec 1996 First Delivery First Delivery Dec 1998 Dec 1998 Dec 1999 Dec 1999 Aug 2000 Aug 2000 September.1. 2007 Mar 2001 Mar 2001 Sep 2001 Sep 2001 May 2002 May 2002 May 2003 May 2003 May 2004 May 2004 Feb 2005 Feb 2005 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Pre-Owned ERJ Transfers 35 Number of ERJs (units) 30 25 20 15 10 5 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 61 pre-owned ERJ transfers in the last two years (2008-09) Source: Embraer (Mar/09) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Mexico Satena .US Nearly 170 pre-owned ERJ transactions since 2000 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .Ukraine Aeromexico Connect .Colombia Diexim Expresso .Finland Dniproavia .Greece City Airline .Angola Athens Airways .Pre-Owned ERJ Transactions BMI – United Kingdom Passaredo .US FinnComm .Sweden Republic .Brazil Trans States .

1st. E195 Delivery to Air Dolomiti (Italy) (January 27. 2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

1st. E170 Delivery to Fuji Dream Airlines (Japan) (February 20. 2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent . E190 Delivery to Niki (Austria) (May 14.1st.

2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .1st. E195 Delivery to Augsburg Airways (Germany) (June 9.

1st. 2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent . E195 Delivery to Windrose (Ukraine) (June 22.

E175 Delivery to Trip (Brazil) (June 24.1st. 2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .1st. E190 Delivery to LAM (Mozambique) (July 31.

E170 Delivery to BA Cityflyer (United Kingdom) (September 3. 2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .1st.

th.. 600 E-Jet delivered to LOT Polish Airlines September 15th. 2009 !!! .

2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent . E195 Delivery to Lufthansa Cityline (Germany) (September 24.1st.

New E-Jet Customer – Air Astana (Kazakhstan) (Nov/09 . 2 E190 Jetscape) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

New E-Jet Customer – Oman Air (Oman) (Nov/09 . 5 E175) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

New E-Jet Customer – Austral (Argentina) (20 E190) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

2010) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent . E170 Delivery to Gulf Air (Barhain) (March 4.1st.

greener aircraft offer. ” Baboo debuts Embraer 190 at London City “We are especially proud to be the first to operate this aircraft. into this most userfriendly airport” – Jacques Bankir.” – Peter Simpson.E190 at London City Airport (2010) Carriers cleared to use Embraer 190 at London City “BA CityFlyer. CEO of Baboo BA CityFlyer starts introducing Embraer 190s “We are now on the last leg of our fleet replacement programme and our passengers will benefit from the extra space these new. the most comfortable and popular regional jet. Baboo and Lufthansa Cityline will be the first to operate the EMBRAER 190 out of LCY. Managing Director of BA Cityflyer The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Grand Slam: E-Jets at Europe´s top airlines Orders Backlog 10 E170 10 E190 Orders 3 Backlog 17 E190 7 Orders Backlog 17 E190 15 E195 Orders 16 Backlog 6 E170 5 E190 Source: Embraer (Dec/09) 6 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

39 Countries . 56 Airlines.620+ E-Jets.

Current Environment Requires Fleet Optimization Decreasing Demand & Yields Fleet efficiency Capacity Cuts Fuel & Environment Pressure is a critical issue to airlines Right-sized aircraft help airlines to improve fuel burn (environment) and results The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

USA 500 Number of Markets 51-150 PDEW 400 55% 151-300 300 22% >300 23% 200 100 0 51 .Market Density Profile .75 100 150 200 250 300 350 400 500 1000 >1000 Passenger per Day Each Way (PDEW) USA domestic mainly low-mid density markets 77% up to 300 PDEW Source: US DOT (3Q09) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Market Density Profile – Latin America 300 26-100 PDEW 250 Number of Markets 54% 200 101-300 28% >300 150 100 18% 50 0 26-50 100 200 300 400 500 600 700 800 >800 Passenger per Day Each Way (PDEW) Intra Latin America mainly low-mid density markets 82% up to 300 PDEW Source: SABRE (2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Market Density Profile – China 250 26-100 200 Number of Markets 46% 101-300 30% 150 >300 100 24% 50 0 26-50 100 200 300 400 500 600 700 800 900 1000 >1000 Daily Passengers China mainly low-mid density markets 76% up to 300 daily passengers Source: China Airline Traffic Statistics 2008 (Markets with at least one weekly frequency) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Passengers per Departure – USA Narrowbodies (121-210 seats) 1000 Annual Flights (x 1000) 900 800 700 600 500 400 300 200 100 0 46-60 61-75 76-90 91-105 106-120 121-135 > 135 Daily Frequencies >2 <=2 Passengers per Departure Around 610.000 flights (~18%) of total J121-210 with loads from 61 to 105 pax per departure and low daily frequencies (up to 2) Source: US DOT (Nov/08-Oct/09) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

095 1.757) (504) Environment: Avg Sector: Avg Fare: Fuel Price: US LCC 800 sm 100 USD 2 USD/gal 61‐75 76‐90 90‐105 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .The CASM Paradigm 2.051) (1.434 1.305 454 177 733 (1.

The CASM Paradigm – the ultimate rule Contribution to Profit per Flight CONTRIBUTION TO PROFIT PER FLIGHT Fare Level 100‐SEATER Pax/Flight < 120 NB Pax/Flight > 120 Passenger Demand per Flight “A place for everything and everything in its place” The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

E-Jets Deployment 21% 8% 14% 29% 25% 6% 5% 32% 7% 33% 5% 57% 40% 49% 62% 20% North North America America 20% 31% Europe Europe 7% 12% 11% C h in a China 33% Middle East Middle East 39% 8% 49% 52% 50% Latin Latin America America Africa Africa Asia Pacific Asia P acific World Source: OAG (1Q10) 50% 20% 9% 21% Right-sizing New Markets Replacement of old Jets Natural Growth The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

E-Jets: Complementing Narrowbodies Madrid – Paris (ORY) Dec/08 SEATS 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Source: OAG (2010) Edmouton–Vancouver Dec/08 Dec/09 San Salvador .Guatemala Amsterdam – Berlin Jan/09 Jan/10 Dec/09 Sep/08 Sep/09 744 606 1032 E190 930 E190 A320 494 A320 342 A320 754 611 B738 B738 A320 F70 B737 B737 E190 A320 B738 E190 A320 E195 A320 A319 A320 A321 A319 E190 B737 E190 B737 A320 B738 B738 E190 CRJ700 A319 E190 E190 E190 B737 B737 B737 B738 E195 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

E-Jets Complementing Narrowbodies The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Vancouver May/07 May/09 Brisbane .Katowice Sep/08 SEATS 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Source: OAG (2009) Amsterdam .E-Jets: Replacing Narrowbodies Frankfurt .Helsinki Dec/08 Dec/09 Los Angeles .Oakhampton Sep/08 Sep/09 Sep/09 714 B737 420 E170 513 392 E190 480 A319 465 E190 690 B737 520 E190 B737 B737 B737 E190 E190 A319 E170 E170 E170 E170 B737 B737 E190 B737 E190 B737 B737 B737 E190 A319 E190 B737 E190 A319 E190 B737 E190 E190 B737 E170 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

E-Jets Helping Explore New Markets Seats Low Cost Carriers with Two Fleet Types 150+ A320 B737-700 A320 A320 100 E190 E190 E190 E190 North America Asia Pacific Europe Middle East The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

E-Jets Helping Reduce Costs and Fuel Burn The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

fuel at 0.eforefficiency.E-Jets: Direct Replacement Benefits Fuel Burn Source: www.com Note: European economic conditions.50 EUR/liter The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Replacement Opportunities . Active in Service. Scheduled Services) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .000 aircraft with more than 15 years old Source: OAG (Dec/09 . Passenger.World (Jets 61-120 seats) 350 B737-500 300 Number of Aircraft 250 Bae 146 B737-200 200 150 100 50 F70 F28 B717-200 F100 TU-134 YAK-42 DC-9 0 5 15 25 35 Average Age (years) Nearly 1.

E-Jets Family Order Book Firm Orders EMBRAER 170 EMBRAER 175 EMBRAER 190 EMBRAER 195 187 140 448 87 Options 48 178 426 70 Deliveries 170 125 263 47 Firm Backlog 17 15 185 40 Total 862 722 605 257 (December 31th 2009) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

E-Jets Worldwide Distribution Customers Firm Orders Diversified customer-base across five continents Increased presence in emerging markets with established carriers Source: Embraer (Dec/09) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

Russia.E-Jets Backlog Evolution Backlog Share per Region (# of Aircraft): 322 Acft 1% 8% 20% 32% 16% 71% 22% Emerging Countries RoW Europe North America 257 Acft 31% 2005 Dec/2009 North America + Europe share decreased from 91% to 53% Source: Embraer (Dec/09) Emerging Countries include Brazil. The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent . China and Eastern Europe. India.

22 99.L12M 2009 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .MONTH 2008 SR .9% 100.00 MAY MAY MAY JUL JUL JUL NOV NOV NOV FEB SEP SEP APR SEP FEB FEB JAN MAR MAR MAR DEC DEC AUG AUG AUG OCT OCT OCT DEC APR APR JUN JUN JUN JAN JAN 2007 SR .2% .2% 99.50 99.L12M CR .00 98.9% 99.MONTH CR .75 98.25 98.00 99.75 99.25 SR/CR (%) 99.E-Jets Schedule Reliability & Completion Rate Schedule Reliability: 99.88 99.50 98. Completion Rate: 99.

CS110 Airbus: A318 Boeing: B737-600 Sukhoi: Superjet 100 Comac: ARJ-21 Antonov: An-148 Mitsubishi: MRJ90 Considering accumulated Net Orders up to Dec/09. The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .Market Share .World (Jets 61-120 seats) Embraer: 170/175/190/195 Bombardier: CRJ700/900/1000.

New Entrants Competitive Scenario 120 E195 E190 SSJ100/95 90 E175 E170 MRJ70 60 1800 ARJ21 MRJ90 CS100 110 Seat Capacity (32'' pitch) 100 110 Seats 100 Seats 80 70-90 Seats 70 2000 2200 2400 2600 2800 3000 3200 Range (nm) The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .E-Jets vs.

A320/737-800 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .500 kg heavier than E195 Higher DOC than E195 Risk associated with new engine technology (GTF) Implications for CS100 inneficient Momentum after Republic CS 150-seater derivative perceived as heavy and CS300 vs.Competition: CS100 vs. E195 4. A319/737-700 Competition vs.

MRJ90 Major design review in 2009: back to metallic wing.500 kg heavier than E175 Equivalent DOC vs. price agressiveness sustainable?? The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent . 3.Competition: E175 vs. increased cross-section. E175 but at higher risks: Challenging integration and development Risk associated with new engine technology (GTF) TSA deal no bid .

) 2nd generation GTF/ATF Health monitoring systems (On condition maintenance) 2020/2025 Open Rotor / New Configs / Advanced Aerodynamics Single pilot capability The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .Expected Technologies for Commercial Aviation 2015/2016 Wingtip devices Advanced structures Composites / Metallic Avionics functionalities Electric taxi Geared and Adv. Turbofan engines 2017/2019 APU Fuel Cell Carbon composites nanotubes (2nd gen.

  Current Technology 2017/2019 2020/2025 4% 7% The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .New Technologies and Next Generation Industry focus on new technologies maturity 2015/2016 Potential COC vs.

Competitive Product Positioning along time Competitive positioning code: higher average lower New entrants introduction mature new entrant Next Gen NB New entrants competitiveness 2010 new entrant maturation competition from next-gen NB 2015 2020 New entrants introduction New entrants competitiveness in case of NB re-engining 2010 Next Gen NB new entrant maturation mature new entrant competition from next-gen NB 2015 2020 The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .Embraer Market Forecast (2010-2019) Projected Deliveries .Jets Market Segment (Seats) 2010 – 2019 Deliveries 60 1015 1550 30-60 61-90 91-120 30-120 2625 Around 2600 jet deliveries (US$ 80bi) in the next 10 years.

Embraer Market Forecast (2010-2019) 2.625 jet deliveries (30-120 seats) Russia / CIS Europe North America 155 6% 580 22% 840 32% China Middle East 340 13% Africa 80 Latin America 105 4% Asia Pacific 3% 315 12% 210 8% The information contained herein is property of Embraer and shall not be copied or used without Embraer´s written consent .

39 Countries . 56 Airlines.620+ E-Jets.