Stock Markets June 6, 2026 04:13 PM

Embraer Says Uncertainty from Iran War Is Causing Some Airlines to Postpone Option Exercises

Brazilian planemaker sees delays in incremental purchase commitments as jet fuel costs rise, while sales campaigns and delivery backlog remain intact

By Marcus Reed
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Embraer chief executive Francisco Gomes Neto said on the sidelines of the IATA annual summit in Rio de Janeiro that some carriers are deferring decisions on whether to exercise previously signed aircraft purchase options amid uncertainty tied to the war in Iran and higher jet fuel prices. The company has not recorded requests to push back deliveries or an overall slowdown in active sales campaigns, and remains focused on converting ongoing opportunities for its E2 family ahead of the Farnborough Airshow next month.

Embraer Says Uncertainty from Iran War Is Causing Some Airlines to Postpone Option Exercises
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Key Points

  • Some airlines are postponing decisions to exercise previously signed aircraft purchase options amid uncertainty from the war in Iran and higher jet fuel prices - impacting airline procurement timing.
  • Embraer has not seen formal requests to delay deliveries or an overall slowdown in active sales campaigns; it maintains a commercial backlog covering nearly five years of deliveries.
  • The company is pursuing multiple sales campaigns for its E2 family, aiming to secure deals at the Farnborough Airshow next month, and is targeting higher output and improved margins through renegotiated contracts and stronger pricing.

Embraer is seeing a cautious shift among certain airline customers that had planned to convert purchase options into firm orders, the aircraft manufacturer's chief executive said on June 6. Francisco Gomes Neto told reporters at the International Air Transport Association's annual summit in Rio de Janeiro that the war in Iran - and the associated rise in jet fuel prices - has prompted some carriers to delay incremental commitments.

Gomes Neto said that, so far, Embraer has not experienced formal requests to postpone scheduled deliveries nor a clear slowdown in the pace of active sales campaigns. Nonetheless, he described a developing tendency for airlines to hold off on exercising options they had previously signed.

"Some companies that could be exercising previously signed options are leaving that a bit further ahead to better understand how the situation will evolve," he said.

The planemaker's commercial backlog covers nearly five years of deliveries, providing a multi-year pipeline of work. Embraer continues to pursue several sales campaigns for aircraft in its E2 family, and management hopes to secure some deals at the Farnborough Airshow in the United Kingdom next month.

Embraer plans to leverage momentum from recent contract wins, including agreements with Finnair for 18 jets and with lessor Azorra for 15 aircraft, following a strong 2025. Management believes the fuel efficiency of the E2 family will be an important factor for prospective customers weighing new purchases.

"There are several campaigns under way," Gomes Neto said, adding that the timing on potential orders hinges primarily on customer decisions. "I don’t know if it will be as strong as last year, but it should still be a good year for commercial aviation."

On production targets, Embraer reiterated an internal ambition to raise output toward delivering between 95 and 100 commercial aircraft in 2027. The outlook for the current year remains between 80 and 85 planes. Gomes Neto emphasized that achieving the higher 2027 target depends more on smoothing supply chain constraints than on the resolution of geopolitical tensions such as the war in Iran.

He noted that bottlenecks that have affected the wider industry since the pandemic are gradually improving and that the key challenge is "getting the cadence right." The company is also targeting margin improvements in its commercial aviation unit through renegotiation of older, lower-profit contracts and by seeking stronger pricing on new deals, he added.

While uncertainty tied to fuel costs and geopolitical risk is prompting some airlines to defer option exercises, Embraer continues to press multiple sales efforts and to plan for stepped-up production, with its multi-year backlog and recent transactions providing underlying commercial momentum.

Risks

  • Geopolitical uncertainty related to the war in Iran and the resulting increase in jet fuel prices could continue to delay airlines' conversion of purchase options, affecting near-term order flow - relevant to aircraft manufacturers and airline procurement.
  • Supply-chain bottlenecks that have persisted since the pandemic need to ease to meet Embraer's ambition of delivering 95-100 commercial aircraft in 2027; continued disruptions would constrain production ramp-up - affecting suppliers and manufacturing timelines.
  • If demand for new aircraft is weaker than expected or customers continue to defer incremental commitments, Embraer's ability to improve commercial aviation margins through stronger pricing may be limited - impacting aerospace sector profitability.

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