• The Airbus A220 and Boeing 737 Max are gaining popularity over Embraer’s aircraft.
• Competitors look to gain market share against Embraer soon in short-haul flying sector.
• Embraer Stock (ERJ) looks to be a sell when comparing its aircraft to others in the industry.

Flying today and its profitability for airlines is a severely complex problem still trying to be solved. How many people are put onto an aircraft, where does an airplane fly to, what size should the aircraft be, and how many flights per day to that city should the airline have been just some of the questions airlines ask themselves when trying to determine what airplane an airline should buy or use. Embraer has answered these questions for airlines quite well in the past couple of decades. However, because of its better fuel efficiency, Embraer is in serious jeopardy of losing its market share, specifically to the Airbus A220 and Boeing 737 Max.

The Good

Embraer specializes in short-haul flying jets with less than 1,500 nautical miles. They have specialized planes such as the ERJ-175, ERJ-190, and ERJ-195. These jets, depending on configuration, hold about 75 to 125 passengers. These jets are very popular for airlines on their less efficient, less profitable routes. For example, a flight from Chicago’s O’Hare International Airport to Wichita, Kansas, is not very popular. Thus, in theory, an airline would…