Some companies are pushing decisions further out, to understand how this situation develops
Airlines postponing aircraft purchase decisions due to geopolitical tensions and elevated aviation fuel costs from Iran conflict. Embraer's order book covers nearly five years of deliveries with no cancellations yet, but incremental commitments facing hesitation.
- Airlines delaying aircraft purchase option decisions due to Iran conflict and elevated jet fuel prices
- Embraer's order backlog covers nearly five years of deliveries with no cancellations reported
- Company targets 80-85 aircraft deliveries in 2026, 95-100 in 2027
- Recent deals include 18 aircraft to Finnair and 15 to lessor Azorra
Embraer CEO reports airlines are delaying aircraft purchase options amid Iran conflict uncertainty and rising jet fuel prices, though the company maintains a strong order backlog and sales campaigns.
The war in Iran is beginning to ripple through the aircraft industry in ways that don't yet show up as cancellations but are visible in hesitation. At the International Air Transport Association's annual summit in Rio de Janeiro on Saturday, Embraer's chief executive Francisco Gomes Neto described a shift in how airlines are thinking about their future fleet commitments. Some carriers who held options to purchase aircraft—agreements made in better times—are now choosing to wait. They want to see how the geopolitical situation settles before locking in orders. The conflict has pushed aviation fuel prices higher, squeezing margins and making every capital decision feel more consequential.
Embraer itself has not yet felt the weight of this caution in the form of canceled orders or delayed deliveries. The company's backlog stretches nearly five years into the future, a cushion that insulates it from immediate pressure. But Gomes Neto was candid about what he's observing in conversations with customers: a new wariness about incremental commitments, the smaller decisions that typically flow from larger purchase agreements. "Some companies that could be exercising the sales options they made earlier are pushing that a bit further out, to better understand how this situation will develop," he said.
The Brazilian aircraft manufacturer remains active in its sales campaigns, particularly for its E2 family of jets, which promise better fuel efficiency—a feature that becomes more valuable when fuel costs are climbing. Embraer recently closed deals with Finnair for 18 aircraft and with the lessor Azorra for 15 more, momentum that carried forward from a strong 2025. The company is preparing to pitch more orders at the Farnborough Airshow in the United Kingdom next month. Gomes Neto expressed optimism about the year ahead, though with a note of uncertainty. "I don't know if 2026 will be as good as last year," he said. "But we are excited. I think it will be a good year for commercial aviation too."
The company's internal targets reveal its ambitions despite the headwinds. Embraer expects to deliver between 80 and 85 commercial aircraft this year, with a goal of reaching 95 to 100 deliveries in 2027. Those numbers depend far less on the resolution of Middle Eastern tensions than on something more mundane but equally critical: the health of global supply chains. The pandemic created bottlenecks that have persisted for years, constraining production across the aerospace industry. Those constraints are gradually easing, Gomes Neto noted, which matters more to Embraer's future than any geopolitical settlement.
The company is also working to improve profitability in its commercial aviation unit. Embraer has renegotiated some older contracts that were locked in at lower margins, a recognition that the market has shifted. The hope is that stronger demand for new aircraft will allow the company to command better prices going forward, offsetting the pressure from higher fuel costs and the caution now visible in how customers approach their options. For now, Embraer is watching and waiting—not yet wounded by the Iran conflict, but aware that the wound could come if airlines decide that uncertainty is reason enough to pause.
Citações Notáveis
Some companies that could be exercising the sales options they made earlier are pushing that a bit further out, to better understand how this situation will develop— Francisco Gomes Neto, Embraer CEO
I don't know if 2026 will be as good as last year. But we are excited. I think it will be a good year for commercial aviation too— Francisco Gomes Neto, Embraer CEO
A Conversa do Hearth Outra perspectiva sobre a história
When the CEO says airlines are "pushing decisions further out," what does that actually mean for Embraer's cash flow?
It means the money doesn't arrive when expected. An option exercised is a contract signed, a deposit made. If that gets delayed six months or a year, Embraer has to manage its own spending and supplier payments in the meantime. It's not a crisis yet—the backlog is deep—but it's a signal.
Why does fuel price matter so much to an airline's decision to buy a new plane?
Because a new plane is efficient. It burns less fuel per passenger. But if you're already struggling with margins because fuel is expensive, you might not have the cash to finance a new aircraft purchase right now. You wait for fuel prices to stabilize, or for your own finances to recover.
The CEO mentions supply chains improving. Is that the real constraint on Embraer's growth, not the geopolitics?
Exactly. Geopolitics is a distraction from the actual bottleneck. Embraer can't build more planes faster than its suppliers can deliver parts. That's the limiting factor. The Iran conflict just adds uncertainty on top of an already tight system.
What does renegotiating old contracts mean?
It means Embraer made deals years ago at prices that don't reflect today's costs. Labor, materials, everything is more expensive now. So they're going back to customers and saying, essentially, we need better terms. Some customers accept because they still want the planes. Others might balk.
If 2026 isn't as strong as 2025, does Embraer miss its 2027 target?
Not necessarily. A weak year in orders doesn't mean weak deliveries two years later. Embraer is delivering planes ordered in 2023 and 2024. The 2027 target depends on what gets ordered now and in the next year. But if this caution spreads, yes, it could affect the numbers.