Embraer (EMBJ.N): Aibus Increasingly Focused on Moving the A220 Up-Market, Opening Space for Embraer‘s E2

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Embraer (EMBJ.N): Aibus Increasingly Focused on Moving the A220 Up-Market, Opening Space for Embraer‘s E2

Embraer (EMBJ.N)

30 July 2026 Citi Research

A major topic of discussion was the outlook for the aftermarket, which has benefited from an unusually favorable

environment over the last several years. Low aircraft retirement rates, strong utilization and limited availability of used parts

have all supported strong pricing, elevated work scopes, and robust profitability across the maintenance ecosystem.

The expectation is not for a downturn, but rather for a gradual normalization. As new aircraft deliveries increase, retirement

rates should eventually move higher, bringing more used serviceable material (USM) into the market. This could moderate

spare-part pricing and reduce overhaul intensity relative to recent years. Even so, demand for maintenance should remain

structurally strong given the aging fleet, continued traffic growth, and persistent supply constraints.

The broader conclusion was that the MRO upcycle remains intact, but growth is likely to return toward historical high-single-

digit levels rather than sustain the exceptional pace seen since the pandemic.

Airbus' A220 strategy could become increasingly favorable for Embraer

The most relevant discussion for Embraer centered on the future positioning of the A220 family. While the aircraft is viewed as

highly competitive from a product standpoint, profitability remains a challenge, particularly on the smaller A220-100 variant.

The view expressed was that Airbus' long-term opportunity lies less in competing aggressively against Embraer's E2 family

and more in pushing the A220 platform up-market. A potential A220-500 stretch was discussed as increasingly a question of

"when" rather than "if".