Jetrader - Winter 2015 - 46

appraisal

Embraer 190AR

Douglas B. Kelly
Senior Vice President - Asset Valuation
ISTAT Certified Senior Appraiser
AVITAS, Inc.
Tel: +1 703-476-2300
doug.kelly@avitas.com

Overview and Background

The E190 is the stretched derivative from
the base E170 model. The E190 features a
fuselage stretched by 20 feet and 6 inches
over the E170, and is designed to accommodate up to 100 passengers. The E190
also features an increased wingspan of 8
feet 4 inches, a strengthened landing gear,
and upgraded General Electric CF34-10E
engines. The AR is the longest range variant of the E190 and can fly up to 2,459 nm
(4,357 km).

The Embraer 190AR is the longest range
variant of the E190 family of aircraft.
Embraer launched the all-new Embraer 170
and Embraer 190 series, the E-Jets, in 1999
to serve the 70- to 110-seat market. The
new Embraer jets were developed as part of
a family of aircraft to bridge the size gap
between the smaller regional jets (30-50
seaters) and mainline narrowbody aircraft.
The E-Jets have a double-bubble fuselage
cross section that accommodates a two-bytwo seating arrangement in the passenger
cabin and a taller cargo compartment in
the lower hold of the aircraft. The aircraft
are powered by two wing-mounted General
Electric CF34 engines. There are four E-Jet
models, and each model is sold in three
sub-variants: the standard, LR and AR.
Each variant has greater range capability
accomplished by their increased maximum
takeoff weight. The different variants
are structurally similar and require only a
paperwork update to change between the
weight options.

Current and Future
Market Outlook
AVITAS is of the opinion that the market
for the E190s will remain balanced with the
potential to strengthen as the economy
and traffic growth improve over the next
few years. The size of this aircraft (up to
100 seats) is popular as airlines aim to
avoid adding a flight attendant (aircraft
with more than 50 seats but less than 101
passengers only require two flight attendants). The average age of the in-service
fleet is relatively young, so the secondary

market for this size regional jet has yet to
be fully tested.
Embraer formally launched its second
generation E-Jet family in June 2013, at
the Paris Air Show. The family will include
the 106-passenger E190-E2 (due to enter
service in 2018 as the direct replacement
for the E190AR), the 132-passenger E195-E2
for service entry in 2019, and the 88-passenger E175-E2, which will enter service in
2020. These aircraft will be powered by the
new, more fuel-efficient Pratt & Whitney
GTF PW1000 engines.
The primary threat to the E190s is the
Bombardier CS100, which is expected
to enter service in 2016. However, the
CS100 has not yet developed a significant backlog and is even trailing the
E190-E2, which was launched much later.
The remaining new opportunities for the
E190 will only be to fill in the production
line until the introduction of the new E2s.
As of October 2015, there are currently
77 firm orders among five customers for
the E190-E2.

Embraer 190AR Values as of October 2015, US$ million
Future Base Values at 1.5% Inflation

Year of
Build

Current
Market Value

2015
Base
Value

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015

13.5
14.6
15.9
17.4
18.9
20.6
22.3
24.2
26.1
28.1
30.3
33.5

12.7
13.7
14.8
16.1
17.6
19.2
20.9
22.7
24.5
26.5
28.5
31.3

11.9
12.9
13.9
15.0
16.4
17.9
19.5
21.2
23.0
24.9
26.9
29.5

11.2
12.1
13.1
14.1
15.3
16.6
18.2
19.8
21.5
23.4
25.3
27.8

10.5
11.3
12.3
13.3
14.3
15.5
16.9
18.4
20.1
21.9
23.7
26.1

9.8
10.6
11.5
12.4
13.4
14.5
15.7
17.1
18.7
20.4
22.2
24.5

9.1
9.9
10.8
11.7
12.6
13.7
14.8
15.9
17.4
19.0
20.7
23.0

8.5
9.3
10.1
10.9
11.9
12.8
13.9
15.0
16.2
17.6
19.3
21.5

7.9
8.6
9.4
10.2
11.1
12.0
13.0
14.1
15.2
16.4
17.9
20.0

7.2
8.0
8.8
9.6
10.4
11.3
12.2
13.2
14.3
15.4
16.7
18.6

6.6
7.4
8.1
8.9
9.7
10.5
11.4
12.4
13.4
14.5
15.7
17.3

The aircraft values stated herein are the product and the property of independent third-party sources, and ISTAT neither approves nor endorses the
information contained herein or the use thereof for any purpose whatsoever.
Aircraft specifications: Engine GE CF34-10E, Max Takeoff Weight 114,199 lbs.
Maintenance assumption: new aircraft is full-life transitioning to half-life at four years old.
46 The official publication of the International Society of Transport Aircraft Trading

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