Opinion: Why Embraer Might Be Ready To Take On Airbus And Boeing

The domination of the large commercial aircraft market by two companies has been going on for so long that it is easy to think that it has always been so. Boeing’s 1997 merger with McDonnell Douglas cemented the Boeing-Airbus duopoly. In the ensuing decades, the airframers settled into a comfortable parity in dividing up the market. The only manufacturer that tried to challenge them, Bombardier, was promptly squashed.

But the duopoly has been roiled in recent years. Airbus has grabbed a commanding lead in sales of narrowbody aircraft, due to the optimal sizing of the A321neo and Boeing’s self-inflicted wounds. Airlines and lessors are frustrated that the two companies cannot deliver enough airplanes to meet demand and, with no competition, seem to be dragging their feet on developing next-generation models. This begs the question: After nearly three decades, is the market finally ripe for a third player? If so, which company would have the best chance of succeeding?

Much focus has been on China’s Comac. Conventional wisdom holds that China’s rapid advances in military propulsion and space eventually will extend to commercial aviation. “The player that is ultimately going to make a difference and become the third competitor is China,” then-Boeing CEO Dave Calhoun told us in 2023.

I’m not so sure. In the near term, Comac does not need to be a global player for its new C919 narrowbody to succeed. China’s domestic market is big enough to soak up most of Comac’s limited production capacity. Developing a truly competitive international product will require certification in the West and the creation of a global maintenance and support network, no small tasks. The ongoing decoupling of the Chinese and Western supply chains poses yet another challenge.

The company to keep an eye on in 2025 is Embraer, the feisty Brazilian manufacturer that was almost bought by Boeing and then jilted at the altar. With excellent engineers and visionary leaders, Embraer has built world-class airplanes for decades while protecting the intellectual property of its suppliers. It is certainly capable of upgauging to a bigger airplane that could challenge the duopoly. Aviation Week has learned that multiple large airlines in the U.S. and Europe have told Embraer they will collectively order hundreds of airplanes if a new program is launched.

It also is no longer a given that Airbus and Boeing will crush any new challenger—or would need to. In 2008, the year Bombardier relaunched its cutting-edge C Series narrowbody program, Boeing forecast a market for 29,400 large jets over 20 years. Today, Boeing sees demand for 44,000 airplanes, an increase of nearly 50%. A third entrant might not be the threat that Bombardier was when it was forced to sell the C Series line (now the A220) to Airbus for $1.

A key question, of course, is whether Embraer can play in the big leagues. It has 1/20th the revenue of Boeing and thus would need a financial partner with billions of dollars to develop a new product. Talk has focused on investors from the Middle East, particularly Saudi Arabia. Another challenge is that Embraer’s business model relies heavily on outsourcing major components. Can an aviation supply chain that is struggling to keep up with the demands of two OEMs support a third? Are the technologies for a game-changing product mature enough? Embraer surely is looking long and hard at those questions.

Finally, we should not rule out the possibility of a market disruptor. Innovative California upstart JetZero is developing a blended wing body aircraft that could be used as both a military tanker and a civil airliner targeting the underserved midmarket segment. The U.S. Air Force has awarded the company a $235 million contract to support development of a full-scale demonstrator that is scheduled to fly in 2027.

Of my many visits to Embraer, I vividly remember a trip with then-Editor-in-Chief Tony Velocci in 2010. The company was considering an upgauged aircraft that would have competed directly with Airbus and Boeing. Embraer’s leaders knew that to succeed they would need a game-changing product. “What we will do will take us to a very competitive airplane, that I can assure you,” one of them told us.

Embraer wisely decided to hold off on challenging the duopoly. Fifteen years later, though, the chess board looks different. Keep your eye on this company. The year ahead could get very interesting.