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Embraer Expects Marriage With Boeing To Succeed Pending Politics

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Embraer Expects Marriage With Boeing To Succeed Pending Politics

Embraer Expects Marriage With Boeing To Succeed Pending Politics
February 24
09:16 2018

MIAMI — Embraer’s CEO, Paulo Cesar, revealed that he expects his company to find a partnership with the North American manufacturer, Boeing, who’s been looking to seize some lost ground after Airbus put its hands on Bombardier’s CSeries program.

According to Cesar, the Brazilian government has given the approval to forge this new partnership with Boeing as it would be “a good transaction for Embraer and the country.”

This potential partnership has been labeled as “politically delicate” move in Brazil. The Brazilian government holds a significant share in Embraer and wants reassurances that its defense program will not be at risk if this deal is to go ahead.

Embraer is in the midst of producing the KC-390 military airlift aircraft, which is set to enter into service this year.

Author: Ministério da Defesa – Brasil

“It is a good opportunity for Embraer and Boeing,” Cesar added.  “There are many changes in the market dynamics, not only among OEMs; there is also consolidation in the supply chain.”

Boeing and Embraer have both confirmed that they had been exploring some opportunities together and that those talks have prioritized following Airbus’ majority stake purchase in the Bombardier CSeries program.

If the regulatory approvals halt Boeing and Embraer’s potential partnership, Airbus will virtually own the single-aisle market of seats ranging from 100 to 130—the sweet spot of the CSeries and Embraer E-2 jets.

Jumping a little further, Boeing will continue to battle Airbus with the 737 MAX vs. A320neo programs, though the A321neo will continue to reign the segment as Boeing has failed to produce a proper Middle of Marker, 757 replacement.

With how things stand, Boeing cannot compete with Airbus in the 100-130 seat segment, as even the 737-700 does not fall under that category.

A partnership between Boeing and Embraer, however, would stir things up and make these two companies an active counterpart to what Airbus and Bombardier have achieved.

Is Boeing Actually Interested in Embraer?


This potential venture has been quite controversial for many reasons. Several analysts argue that Boeing’s sudden interest in Embraer was sparked solely because Airbus purchased a significant stake in the CSeries program; a move that inherently leaves Boeing out of a competition that was never part of in the first place.

Another incentive that might push Boeing to clinch this deal is the upcoming Farnborough Air Show in July, where Airbus and Bombardier will inevitably join forces to expedite some much needed CSeries sales, taking advantage of the fact that the American manufacturer won’t have any products to compete against with.

Picture from Embraer.

With the 737 MAX 7 remaining out of scope in this competition, having scored marginal orders in the past, Boeing sees evidence that the smallest plane in its portfolio is far away from becoming a success. Up to date, only 58 MAX 7 planes have been ordered by Southwest (30), WestJet (23), and Canada Jetlines (5).

But on the other side of the pond, Airbus hasn’t found decent orders for its smallest plane, the Airbus A319neo. In fact, the manufacturer’s CEO, Tom Enders, qualified the aircraft as “marginal” and “not a best seller” during an event in Toulouse, having sold only 30 planes so far.

Airbus is eager to see how the demand on the A319neo performs now that it can officially include the Bombardier CSeries CS300 in its product portfolio. Enders said that the CSeries is a “very competitive aircraft” and that Airbus wouldn’t have put their hands on the program if it were any different.

Now that Airbus and Bombardier are walking down the aisle with a promising future, Boeing might see an urgent need to clinch a much-needed signature from the Brazilian planemaker.

What’s the real reason behind this Boeing, Embraer marriage?


Looking away from the perpetual Boeing versus Airbus contest, both manufacturers’ sudden interest in the lower seat segments could be a result of market saturation.

Paul Weatherman photo. (PRNewsfoto/Boeing)

With the A320neos and 737MAXs already securing super strong backlogs, it is quite likely we may not see substantial orders at the Farnborough Air Show within this range of products.

However, with an aging fleet of higher-density regional jets throughout the world, the need for replacement planes might light the order flame at the air show, putting Boeing in a very tight spot should it not be able to secure a partnership with Embraer.

Politics shall decide


As of today, figuring out how Boeing wishes to proceed remains a mystery. With the ITC ruling in favor of Bombardier a whopping 4-0 against Boeing, the American manufacturer might be compelled to pursue a rapid resolution with Embraer if it wants to remain as the Airbus competitor in all its portfolio segments.

However, the geopolitical encumbrances might hinder Boeing’s ability to secure this partnership, leaving the fate of both manufacturers in the hands of politics.


—Written in collaboration with James Field and Enrique Perrella

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A Global Review of Commercial Flight since 1994: the leading Commercial Aviation publication in North America and 35 nations worldwide. Based in Miami, Florida.

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