Embraer (NYSE: ERJ) delivered a total of 14 jets in the first quarter of 2020, of which five were commercial aircraft and nine were executive jets (five light and four large). As of March 31st, the firm order backlog totaled USD 15.9 billion.
Historically, Embraer seasonally has fewer deliveries during the first quarter of the year, and in 2020 in particular, the commercial aircraft deliveries in the first quarter were also negatively impacted by the conclusion of the separation of Embraer’s Commercial Aviation unit in January.
During the first quarter, Embraer Executive Jets announced that the new Phenom 300E was granted its Type Certificate by ANAC (National Civil Aviation Agency of Brazil), EASA (European Union Aviation Safety Agency) and the FAA (Federal Aviation Administration). The new Phenom 300E is the recently enhanced version of the Phenom 300 series, which was the most delivered business jet series in the 2010s.
Also in this period, Emgepron, a Brazilian state-owned company linked to the Ministry of Defense through the Brazilian Navy Command, and Águas Azuis, a company created by thyssenkrupp Marine Systems, Embraer Defense & Security and Atech, signed the contract to build four state-of-the-art Tamandaré Class Ships, with deliveries scheduled between 2025 and 2028.
SAO PAULO, May 14 (Reuters) – Brazilian airline Azul SA said on Wednesday it had agreed with planemaker Embraer SA to delay the delivery of 59 E2 jets, with a list price of 24.5 billion reais ($4.16 billion), to 2024 or later.
The planes had been initially set for delivery from 2020 to 2023, according to an Azul securities filing.
Azul said the agreement was a step to shore up its business amid the COVID-19 pandemic, which also led it to reduce its April capacity by 90% in comparison to the same month in 2019.
($1 = 5.8852 reais)
(Reporting by Alberto Alergiri; Editing by Sandra Maler)
Boeing (NYSE: BA) announced today that it has terminated its Master Transaction Agreement (MTA) with Embraer, under which the two companies sought to establish a new level of strategic partnership. The parties had planned to create a joint venture comprising Embraer’s commercial aviation business and a second joint venture to develop new markets for the C-390 Millennium medium airlift and air mobility aircraft.
Under the MTA, April 24, 2020, was the initial termination date, subject to extension by either party if certain conditions were met. Boeing exercised its rights to terminate after Embraer did not satisfy the necessary conditions.
“Boeing has worked diligently over more than two years to finalize its transaction with Embraer. Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We all aimed to resolve those by the initial termination date, but it didn’t happen,” said Marc Allen, president of Embraer Partnership & Group Operations. “It is deeply disappointing. But we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues.”
The planned partnership between Boeing and Embraer had received unconditional approval from all necessary regulatory authorities, with the exception of the European Commission.
Boeing and Embraer will maintain their existing Master Teaming Agreement, originally signed in 2012 and expanded in 2016, to jointly market and support the C-390 Millennium military aircraft.
Jacksonville, EUA, April 17, 2020 – Embraer Defense & Security and Sierra Nevada Corporation (SNC) announced the first of 12 A-29 Super Tucano light attack, combat and reconnaissance aircraft for the Nigerian Air Force (NAF) successfully completed its inaugural flight at the production facility in Jacksonville, Florida.
The full fleet of A-29 Super Tucano aircraft for the NAF are currently in production by SNC and Embraer at the Jacksonville facility with delivery to the NAF expected on schedule in 2021.
The NAF A-29 aircraft will now begin mission modification and final testing in Centennial, Colorado. Following final testing, before delivery, NAF pilots will train in the aircraft.
“This is an exciting milestone in the production of these A-29s for the Nigerian Air Force. The Jacksonville production line is active, and Embraer and SNC look forward to seeing these aircraft continue to roll off the line in the coming months,” says Jackson Schneider, president & CEO, Embraer Defense & Security.
“The aircraft met or exceeded all the requirements and we are very pleased with the successful flight,” stated Ed Topps, vice president of Tactical Aircraft Systems and programs for SNC’s IAS business area. “SNC and our partner, Embraer, are certain the Nigerian Air Force will be pleased with these aircraft.”
The combat-proven A-29 Super Tucano is the gold standard of light attack combat and reconnaissance aircraft around the world and is designed and built for the mission in Nigeria.
The A-29 Super Tucano is the most reliable and cost-effective solution for basic and advanced flight and combat training, close air support operations, Intelligence, Surveillance, and Reconnaissance (ISR), armed over-watch, counterinsurgency and irregular warfare scenarios.
The aircraft has already been selected by 15 air forces around the world to deliver cost-effective close air support and reconnaissance capabilities.
In December 2018, SNC and Embraer Defense & Security were awarded the contract to deliver 12 A-29 Super Tucano light attack aircraft to the Nigerian Air Force. The contract for the NAF includes ground training devices, mission planning systems, mission debrief systems, spares, ground support equipment, alternate mission equipment, contiguous U.S. interim contractor support, outside of continental U.S. (OCONUS) contractor logistic support and field service representatives for OCONUS support.
On March 5th, in Rio de Janeiro, Emgepron, an independent state company, linked to the Ministry of Defense through the Brazilian Navy Command, and Águas Azuis, a company created by thyssenkrupp Marine Systems, Embraer Defense & Security and Atech, signed the contract for building four state-of-the-art Tamandaré Class Ships, with deliveries scheduled between 2025 and 2028.
The construction will take place 100% in Brazil, in Itajaí, Santa Catarina State, and is expected to have local content rates above 30% for the first vessel and 40% for the others. thyssenkrupp will supply the naval technology of its proven MEKO® Class shipbuilding platform of defence vessels that is already in operation in 15 countries. Embraer will integrate sensors and weaponry into the combat system, bringing also to the program its 50 years’ experience in systems technology solutions and in-service support.
Atech, an Embraer Group company, will be the supplier of the CMS (Combat Management System) and IPMS (Integrated Platform Management System, from L3 MAPPS), and the recipient of technology transfer in cooperation with ATLAS ELEKTRONIK, a thyssenkrupp Marine Systems subsidiary that produces the CMS and sonar systems.
“We are grateful to participate again in such important milestone in the history of Brazil’s naval defence with the most advanced ships in their class. Looking back the great achievements we had since the construction of Tupi Class submarines in 1980s, it is a recognition of the technological excellence, reliability and longevity solutions we have offered for almost two centuries. The Tamandaré Class Programme will strengthen our ties by transferring technology and generating highly qualified jobs for the country”, said Dr. Rolf Wirtz, CEO of thyssenkrupp Marine Systems.
“The partnership validates our efforts to expand our defence and security portfolio beyond the aeronautical segment. Over the past few years, we have acquired expertise in developing and integrating complex systems, among others, in order to qualify Embraer to meet the needs of the Brazilian Navy, further strengthening our position as a strategic partner of the Brazilian State”, said Embraer Defense & Security President and CEO Jackson Schneider.
In addition to construction, the contract includes a sustained transfer of technology in naval engineering for building military ships and combat and platform management systems, as well as integrated logistical support and lifecycle management.
The Tamandaré Class Programme has the potential to generate direct and indirect job opportunities of high level of qualification. It provides for a solid national partnership model with proven ability to transfer technology and qualify local labour, which guarantees the development of future strategic defence projects in Brazil.
The naval alliance between thyssenkrupp Marine Systems and Embraer Defense & Security can also enable creating a base for exporting naval defence products from Brazil.
Embraer (ERJ) delivered a total of 198 jets in 2019, of which 89 were commercial aircraft and 109 were executive jets (62 light and 47 large), which represents an increase of 9% compared to 2018, when the Company delivered a total of 181 jets. The deliveries were within the outlook ranges for 2019 of 85 to 95 for the commercial aviation market and of 90 to 110 for the business aviation market. In the fourth quarter of 2019, Embraer delivered 81 jets, being 35 commercial aircraft and 46 executive jets (20 light and 26 large). As of December 31, the firm order backlog totaled USD 16.8 billion. See details below:
Deliveries by Segment
4Q19
2019
Commercial Aviation
35
89
EMBRAER 175 (E175)
22
67
EMBRAER 190 (E190)
2
5
EMBRAER 195 (E195)
1
3
EMBRAER 190-E2 (E190-E2)
4
7
EMBRAER 195-E2 (E195-E2)
6
7
Executive Aviation
46
109
Phenom 100
4
11
Phenom 300
16
51
Light Jets
20
62
Legacy 650
3
5
Legacy 450
10
15
Legacy 500
5
11
Praetor 500
3
3
Praetor 600
5
13
Large Jets
26
47
TOTAL
81
198
In the fourth quarter of 2019, Embraer delivered the first Praetor 500 business jet to Flexjet, a global leader in private jet travel, just over one year after its announcement at the 2018 National Business Aviation Association’s Business Aviation Convention and Exhibition (NBAA-BACE).
Embraer also announced the expansion of its Executive Jets Service Center at Fort Lauderdale-Hollywood International Airport (KFLL), expanding its service capacity through a lease agreement with Jetscape Services for a dedicated hangar. Embraer’s presence in Florida is strategic for its Executive Jets customers throughout the Southern United States, the Caribbean and Central America as well as for those whose travel frequently brings them through South Florida.
In the same period, Embraer delivered the second KC-390 Millennium to the Brazilian Air Force and the contract with the Portuguese Government for a firm order for five KC-390 airlifters was included in Embraer’s backlog in the fourth quarter of 2019.
At the Dubai Air Show, Embraer announced the name and designation of its multi-mission medium aircraft, the Embraer C-390 Millennium. The new designation reflects increased flexibility and value for operators that look for a transport/cargo aircraft to perform airlift and air mobility missions, among others. In addition, Embraer and Boeing announced that the joint venture to promote and develop new markets for the C-390 Millennium multi-mission airlift and air mobility aircraft will be called Boeing Embraer – Defense. The organization will only be operational after the companies’ joint venture receives regulatory approvals and meets closing conditions.
Also during the event in Dubai, Embraer announced two contracts for commercial aircraft: a contract with Air Peace for three additional E195-E2s, confirming purchase rights from the original contract and a firm order for three E190 jets with CIAF Leasing.
Embraer welcomed three new E2 operators. Helvetic Airways, from Switzerland, and Air Kiribati, national airline of the Republic of Kiribati, received its first E190-E2 jets, while Binter, of Spain, received its first E195-E2. Embraer also signed firm orders with SkyWest, for 20 E175 that will be operated by American Airlines, and with Congo Airways for two E175 aircraft, with purchase rights for a further two.
SINGAPORE (Reuters) – Competition is cranking up in the world of turboprops.
For years turboprops were an ignored corner of the aircraft industry, accounting for about 120 aircraft a year compared with the more than 1,000 jets made by giants Airbus and Boeing.
But growing rivalries in the turboprop business cut through a Singapore Airshow depleted by coronavirus this week.
While intercontinental jet travel is vulnerable to trade wars and disruptions such as epidemics, regional development in archipelago nations like Indonesia is favouring the turboprop.
The market has been dominated for years by Europe’s ATR, jointly owned by Airbus and Italy’s Leonardo, which enjoys a relatively undisturbed lion’s share of the market with a small slice also held by the Canadian-owned De Havilland Dash 8.
But the commercial arm of Brazil’s Embraer is sharpening a pitch to return to the market and Chief Executive John Slattery told Reuters he expected a decision by the end of the year.
“We should be positioned in the mid-to-late fourth quarter to bring a business case with a recommendation to our board,” he said in an interview.
In a sign that the development is accelerating, Slattery said he had held talks with three potential engine suppliers – Rolls-Royce, General Electric and Pratt & Whitney Canada, part of the engine unit of United Technologies.
“We are fully engaged with engine manufacturers now and meeting here at the air show…We are excited by where we are.”
Until now, planemakers have found it difficult to justify the estimated $2-4 billion investment needed to develop a new turboprop, despite its efficiency on relatively short flights.
The market has been stagnant at about 120 deliveries a year and demand for the planes is dependent on volatile oil prices, with turboprops displacing small jets when prices are high.
The thrumming noise of the propellor-driven turboprop also puts some passengers off, travel experts say, even though many in the industry say that reputation is already out of date.
Slattery said quiet new engine technology and advances in passenger comfort would stimulate demand.
“We believe the market opportunity going forward is significantly different to what past decades have shown.”
COMPETITION BOOST
China has already entered the fray with its planned MA700.
At ATR’s bright-red stand inside Singapore’s exhibition hall, Chief Executive Stefano Bortoli shrugged off the threat of a comeback by Embraer which already makes smaller turboprops.
“I think once Embraer will let us know their decision you will have our comments. At this point in time it is simply commenting on opinions. Not that we will stand still,” he said.
The fundamental shape of the two-aircraft ATR family seating 40-78 people has not changed in about 30 years, but the aircraft was modernised with the -600 variant around a decade ago.
ATR recently launched a freighter and a version designed for use on short runways, which has opened opportunities in markets such as Japan and Papua New Guinea, where PNG Air emerged as a launch customer this week.
“The approach we’ve taken…is let’s consolidate the platform that we have…and when the right time comes and there are solid options available, let’s go for that,” Bortoli said.
ATR shareholders have clashed in the past about whether to launch a bigger new 90-seater, with Toulouse-based Airbus blocking the investment. But industry analysts say ATR would have to consider responding to a new plane from Embraer.
The prospect of greater competition in turboprop adds zest to efforts by Embraer to complete a tie up with Boeing, which has agreed to acquire control of its commercial division.
The European Commission has extended its scrutiny of the $4 billion deal, fearing that it would narrow options for airlines.
Slattery reiterated Embraer would only have the appetite to invest in a new turboprop in the context of the Boeing venture.
He declined to elaborate but industry experts say it is a signal to Europe that the Boeing deal would improve choice for airlines by prompting ATR to come up with its own new product.
One European source said it remained doubtful whether Boeing would support a new turboprop once it gained control of Embraer, but analysts note the U.S. planemaker has not yet ruled it out.
(Reporting by Tim Hepher, Jamie Freed; editing by David Evans)
FILE PHOTO: Groundcrew prepare a Liat airlines ATR 42 plane on the tarmac at Barbados’ Grantley Adams International Airport
São José dos Campos, Brazil, January 30, 2020 – Embraer and SkyWest, Inc. (NASDAQ: SKYW) signed a firm order for 20 E175 jets in a 76-seat configuration. The order has a value of USD 972 million, based on 2019 list prices, and is already included in Embraer’s 2019 fourth-quarter backlog. Deliveries are expected to begin in the second half of 2020.
“Embraer and SkyWest enjoy a partnership marked by a longstanding history of service to the mainline carriers, and we relish the opportunity to break new ground,” said Charlie Hillis, Vice President, Sales & Marketing, North America, Embraer Commercial Aviation. “Today, we are excited to announce that these 20 new aircraft will be the first E-Jets operated by SkyWest within the American Airlines network.”
“We’re pleased to continue advancing our position in the industry with this latest order of new Embraer aircraft,” said Chip Childs, President and Chief Executive Officer of SkyWest, Inc. “We appreciate the long-standing partnership with Embraer and look forward to operating this outstanding aircraft for all four of our mainline partners.”
Embraer’s relationship with SkyWest dates back to 1986, when SkyWest began operating the EMB 120 Brasilia turboprop. With this additional order for the E175, SkyWest has purchased more than 180 aircraft of this model since 2013 alone.
Embraer is the world’s leading manufacturer of commercial jets with up to 150 seats. The Company has 100 customers from all over the world operating the ERJ and E-Jet families of aircraft. For the E-Jets program alone, Embraer has logged almost 1,800 orders and 1,500 deliveries, redefining the traditional concept of regional aircraft.
The Boeing logo is displayed on a screen, at the NYSE in New York
BRASILIA (Reuters) – Brazilian antitrust regulator Cade on Monday approved Boeing Co’s <BA> purchase of Embraer SA’s <ERJ> commercial aviation division without restrictions, according to a statement on the agency’s website.
Cade’s top administrative council could still call for a reconsideration of the case, putting the matter to a vote.
The companies welcomed the move on Monday, with Boeing saying it remained confident of getting approval from the European Commission, the last hurdle to the transaction.
The European Union has set an April 30 deadline to decide on the deal.
Boeing has offered to pay $4.2 billion for 80% of Embraer’s commercial jet division, which builds passenger jets in the 70- to 150-seat segment.
That puts it in direct competition with next-generation jets designed by Bombardier Inc <BBD-B.TO> and acquired by Europe’s Airbus SE <EADSY>, which rebranded them the A220 program.
(Reporting by Ricardo Brito; additional reporting by Kanishka Singh; Writing by Jake Spring; Editing by Sandra Maler, Marguerita Choy and Aditya Soni)
E2-195 plane with Brazil’s No. 3 airline Azul SA logo is seen during a launch event in Sao Jose dos Campos
A Boeing 737 Max aircraft taxis the runway at the Renton Municipal Airport in Renton
SYDNEY (Reuters) – Papua New Guinea carrier Air Niugini has updated its contract with Boeing Co <BA> to delay the delivery of its four 737 MAX jets on order until at least 2024, the airline’s chief executive said on Tuesday.
The carrier had been due to receive its first 737 MAX this year.
Air Niugini Chief Executive Alan Milne told Reuters the delay would give the airline more time to complete a broader review of its fleet plans, including a replacement for its smaller Fokker jets.
“This will then determine if the MAX is still appropriate for Air Niugini, or whether another Boeing product would better suit as a replacement for the 737/767,” he said, in reference to older models in the airline’s fleet.
Milne said it was possible the 737 MAX orders could be switched to the smaller Embraer SA <ERJ> E2 family if Boeing’s deal to buy the bulk of the Brazilian planemaker’s commercial division closes.
“Air Niugini is a valued Boeing customer and we are working closely with the airline to meet its evolving fleet requirements,” a Boeing spokesman said. “Unfortunately, we do not disclose ongoing customer discussions and have no further comment.”
Some other Boeing customers, including Malaysia Airlines, Virgin Australia Holdings Ltd <VBHLF> and Norwegian Air Shuttle ASA’s <NWARF> leasing arm have also postponed the delivery of 737 MAX jets since the model was grounded globally last March after two fatal crashes.
Boeing confirmed on Monday that it has temporarily halted production of the 737 MAX in Washington State in recent days. The company had said in December it would halt production at some point this month.
(Reporting by Jamie Freed; Editing by Paul Simao and Sam Holmes)
