The options for business jets in the midsize and super-midsize range have grown further following Embraer’s introduction of two new business jets.
The Embraer Praetor 500 and Praetor 600 are fully fly-by-wire business jets that offer new cabins, active turbulence reduction, and what the company says will be the longest-range planes in their class.
The midsize Embraer Praetor 500 also lays claim to be the fastest midsize business jet on the market with a maximum speed of mach 0.83.
A first for jets of their size is a best-in-category 5,800-foot cabin altitude and the highest payload capacity.
For a company with an already broad range of business jets on offer, what is it Embraer have seen in the market, and what are their intentions going forward?
The new Praetor business jets are based on derivatives of Embraer’s Legacy 450 and 500 jets. New winglets and extra fuel tanks have been added for greater range, as well as a new interior style and advanced technological features in the cabin and cockpit.
Embraer have gone all out to impress; with max altitude, speed and technology claims for its category.
Take the Praetor 600, the business jet is an attempt by Embraer to gain ground in the lucrative super-midsize segment.
The company says it has an intercontinental range of 3,900 nautical miles with four passengers aboard, making it capable of flying nonstop from New York to London. It can be configured for eight to 12 passengers.
Both business jets are powered by twin Honeywell HTF 7500E turbofan engines, with a higher-thrust version for the Praetor 600. The flight deck features a Rockwell Collins ProLine Fusion avionics suite, an optional enhanced vision system with a heads-up-display, and what Embraer says is an industry-first vertical weather display. The planes will give passengers 16Mbps connectivity courtesy of ViaSat’s Ka-band, and IPTV, which Embraer says is an industry exclusive among midsize business jets.
New jet development
The Praetor 600 will be entering contested airspace, with the Gulfstream G280, Dassault Falcon 2000S and the forthcoming Cessna Longitude, which could enter service by the end of the year, in addition to the Challenger 350.
The Praetor 500 will face less competition, going up against the Cessna Citation Sovereign+ and Embraer’s own Legacy 450, where there’s overlap in size and seating capacity.
Embraer was rumoured to be developing a new super-midsize, a fairly new category with cabins almost as big as large business jets but not as much flight range as the large business jets.
Embraer and Boeing
Embraer is in negotiation to sell an 80% stake in its commercial aviation business to Boeing. It aims to complete the deal next year.
As part of this strategy the Brazilian aerospace company will refocus on its executive jet and defense segments.
Embraer Executive Jets is the larger of the two main business units that will remain, with projected 2018 revenue between $1.35 billion and $1.5 billion.
It is seen by Embraer as imperative for the executive jet segment to grow by increasing its sales, with a focus on its earnings. The company’s strategy is that the two new business jet models unveiled last weekend will help it achieve that goal.
Embraer business jet sales
Business jet sales have stagnated at Embraer, as the wider sector struggled to recover following the global financial crisis. Even though it has steadily introduced new models and updated others, growth hasn’t accelerated.
Deliveries total 119 in 2013, 116 in 2014, 120 in 2015, 117 in 2016, and 109 in 2017. The company’s 2018 guidance calls for 105 to 125 deliveries in the executive jet unit.
However; market conditions were even worse than these delivery figures suggest, as Embraer was propping up its volume with margin-killing discounts up until last year.
Fortunately for Embraer, the market is turning around. Federal tax reform – a provision that allows companies to immediately deduct the full cost of capital investments; such as business jets, along with buoyant corporate profits have caused demand to spike in the U.S demand.
Therefore, the timing is good for Embraer to launch two new business jets.
The two new business jet models were revealed on the 14th October 2018.
They will compete in the midsize and super-midsize segments, respectively. As such, they serve as successors to Embraer’s Legacy 450 and Legacy 500 executive jets.
Global business aviation experts agree on the large that the Praetor 500 and Praetor 600 will be compelling offerings. Yet that doesn’t guarantee that they will be financially successful.
A risk to Embraer, as it is to any product launch, is that its competitors could respond to these two new business jets by making even bigger improvements to their midsize and super-midsize offerings themselves.
Even Embraer themselves have made changes to their line-up. The Legacy 450 and Legacy 500 models were introduced less than five years ago. The delivery total for the two models combined currently stands at roughly 100 – which is not overly impressive considering that these two new business jets; the Praetor 500 and Praetor 600 will supersede them next year. Embraer probably hasn’t come close to earning enough profit from the Legacy 450 and Legacy 500 jets to cover the cost of their development.
But relative to their competition, Embraer seem to have the edge in terms of price and performance.
The investment in the Legacy 450 and Legacy 500 hasn’t been a total loss, since the new Praetor models are derivatives of them, therefore one can only assume that Embraer of have been efficient in its development process of the new aircraft – recognizing that to capture customers in this sector of the market they needed new more compelling and competitive offerings of their midsize and super-midsize business jets.
Enter the Praetor 500 and Praetor 600
Increased range will be one of the biggest selling points of these new aircraft. The Praetor 500 will have up to 3,250 nautical miles of range. That’s more than enough for transcontinental routes. It will also allow the aircraft to fly between Europe and the West Coast with only one stop.
The Praetor 600 is even more impressive, with up to 3,900 nautical miles of range. That’s enough to fly between London and New York.
Embraer’s newest business jet models will feature of other improvements. The interior has been upgraded, high-speed Wi-Fi installed, and various technical changes will allow the airplanes to offer a smoother and more comfortable flight.
Pricing
The base prices for the Praetor 500 and Praetor 600 are just $1 million higher than those of the Legacy 450 and Legacy 500, respectively. So, while Embraer is still selling the Legacy 450 and Legacy 500 – at least for now they will effectively become obsolete when the new models become available less than a year from now.
Base list price is expected at $17 million. The base Legacy 450 lists for $16.57 million, and the Legacy 500 for $20 million.
The Market
There were 86 super-midsize aircraft built last year, led by Bombardier’s Challenger 350, which was the top-selling business jet of 2017, with 56 deliveries. Forecasts expect the market to top 100 aircraft built a year by 2021.
There were 32 midsize aircraft built in 2017.