It did not take long for the Embraer Phenom 100 to become Brazil's most common business jet. The first Phenom 100 for a Brazilian customer was delivered as recently as June 2009 and there are already 46 Phenom 100s in operation in Brazil, making it the biggest business jet fleet in Brazil, according to Embraer's Luis Carlos Affonso.
"There are no other types with more units flying in Brazil today from any other manufacturer," says a proud Affonso, who is the executive vice-president of Embraer's executive jets division.
More than 150 Phenom 100s are in operation based in 18 countries and Brazil accounts for about 30% of the global Phenom market, second only to the USA. Affonso expects Brazil to maintain that position and says Brazilian customers account for about 15% of the company's Phenom 100/300 future orders. There are about 10 Phenom 300s in service, with the first Brazilian example for a Brazilian customer having been delivered in May.
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© TAMTAM Aviacao Executiva sells and maintains the Cessna Mustang in Brazil |
As the only business jet manufacturer in Brazil and all of Latin America, Embraer has been able to exploit its home advantage in selling the Phenom. Affonso says "local support and local expertise has been an important differentiator" compared with manufacturers from Europe and North America. But he says Brazil's rapid economic growth has also helped drive Embraer's success in selling light jets in its home market.
"We are of course a very strong brand in Brazil. Embraer is one of the most admired companies in Brazil. But also the market is expanding. It's the right moment," Affonso says.
During the current downturn, business jet demand in Brazil and Latin America overall has grown while demand from other regions has slowed dramatically. South America escaped the global recession relatively unscathed with Brazil, the largest economy and by far the continent's largest business jet market, particularly chalking up healthy growth.
"Brazil economy's is doing very well. In the first quarter the country GDP grew an annualised value of 9%. Brazil is even taking measures to cool down the economy," Affonso says.
But Embraer is by no means the only business aircraft manufacturer to take advantage of this growth. "In the first half of this year Brazil has been one of my most active territories," says Hawker Beechcraft president of jet sales for the Americas Richard Emery.
Cessna director of international sales Todd Duhnke says Cessna also has seen "solid growth in Brazil and a lot of other Latin American countries" including Argentina and Chile. "The Brazilian economy has held up a lot better than a lot of other economies have held up. It's gotten out of the global economic crisis quicker than other parts of the world," Duhnke says.
Brazil has been a particularly strong market for the Cessna Citation Mustang light jet, which entered service in late 2006. Duhnke says there are already 25 Mustangs operating in Brazil, accounting for about 8% of the total Mustang market. To date, about 320 Mustangs have been delivered.
Affonso says Brazil overall accounts for only about 4% of the world's business jet fleet. But the nation's portion of the light jet market is significantly higher and its slice of the total pie is growing rapidly.
Light jets, in particular the Phenom 100 and Mustang, have proven to be very popular as some of Brazil's medium-size firms start to use aircraft as a tool for expanding their businesses. Unlike the US market, where light jets are typically owner-flown, in Brazil Mustangs and Phenoms are primarily flown by corporate flight departments.
Affonso says he knows of only one owner-flown Phenom in Brazil. "Other than that the overwhelming majority are companies and entrepreneurs that fly to do business, and they have professional pilots flying them. It's corporate - not big, but medium companies, many of them buying the Phenom as their first airplane really to do business efficiently in Brazil," Affonso says. "Brazil is a big country. You have to fly four to five hours from one end to another in the country. If you operate nationally really you need a business jet to be able to be efficient."
He points out the Phenom 100 has the range to cover from São Paulo the entire south and south-west portions of Brazil as well as far up to Recife, from where most of the north and north-east can be covered. "Within Brazil there are different regions that are growing a lot - like the north and north-east areas. Entrepreneurs from the south or south-east are expanding their businesses towards different regions and for this reason they are needing an airplane," Affonso says.
Dunkhe also says that only a small number of Mustangs in Brazil are owner-flown and most deliveries are to businesses. He says for some Brazilian customers the Mustang is their first aircraft or first jet while others have added the Mustang "as a stablemate to larger aircraft" including larger members of the Citation family. "It's a very efficient way to get around," Dunkhe says of Brazil's Mustangs.
He adds that Cessna has also started to see some businesses that began with Mustangs add larger Citations. Affonso expects some of Brazil's Phenom 100 customers will also start to upgrade to Phenom 300s, which have the range to reach Manaus in the Amazon region from São Paulo, "but for the majority it's still a bit too early", given the Phenom 100 has been operating in Brazil for just over one year.
Affonso says some Phenom customers are also using their new light jets to supplement or replace twin-engined turboprops, a common type of aircraft in Brazil given the country's vast geography and short airstrips. "Many people are buying the Phenom 100 as their first airplane, but others are migrating from twin turboprops. The Phenom 100 is less expensive to buy than comparable twin turboprops and from 300nm [555km] on it's less expensive to operate," Affonso says.
"Even though it uses more fuel per hour it goes much faster, so per trip it's more economical, which is amazing for a jet. I don't see any reason for someone to buy a twin turboprop unless you really go into an unprepared runway," he adds.
But Emery says that demand for the Beechcraft King Air, which for years has been a strong seller in Brazil, continues to grow. He says that this is a result of Brazil's economic growth as well as the country's "challenging airport environment".
Hawker Beechcraft claims it has a 74% share of Brazil's business turboprop market, or 341 aircraft of an estimated 459 operating. "The turboprop market down there continues to dominate," Emery says.
He says the company also has seen this year in Brazil "a decent amount of activity with the Premier" as interest in the light jet is increasing, although he acknowledges the Premier has so far not been as successful in Brazil as the Phenom and Mustang. There are about a dozen Premiers operating in Brazil.
"Certainly we're doing everything we can to be competitive in that marketplace with Embraer and Cessna," Emery says. "Embraer is a strong competitor in Brazil. They have home court advantage and a nationalistic thing working in their favour. We view Embraer as the 800lb gorilla down there."
Emery points out that in addition to the twin turboprop sector, Hawker Beechcraft has had a lot of success in Brazil selling midsize jets, giving the manufacturer confidence it can also ultimately be successful in the light jet sector. Hawker Beechcraft claims it has a market share of more than 40% in Brazil's midsize jet sector.
Emery says Hawker 700/800/900 series jets "has done very well for us" in Brazil and the 900 is particularly well suited for the Brazilian market. He says demand for midsize jets continues to be strong in Brazil this year and in recent months "interest has risen in the super-midsize segment".
"I think we'll have a good year in Brazil," Emery says. "I expect deliveries in Brazil to continue on their current path, which has been a path of rapid growth."
Affonso says that while "Brazil is a bigger market for smaller airplanes, the Legacy has been very successful there too". He says of the 180 Legacys operating around the world, 15 are in Brazil, including 10 in civil operation and five with the Brazilian air force.
Embraer is aiming to display at the 2010 Latin American Business Aviation Conference and Exhibition (LABACE) its new Legacy 650, which is on track to be certificated later this year. This Legacy 650, which has never been shown at an exhibition or air show, will be joined by a Phenom 100 and Phenom 300.
Cessna plans to bring a CJ, Mustang and Citation X with winglets. Duhnke says overall the Citation market in Brazil has remained strong with over 225 aircraft already in operation. "The aircraft is a perfect match for Brazil," he says.
Hawker Beechcraft plans to display a Premier, Hawker 900 and Hawker 4000. On the turboprop side Hawker Beechcraft plans to display its two newest King Air models, the 350i and C90GTx, while Cessna plans to display a 208 Grand Caravan. The seventh annual LABACE show will take place in São Paulo on 12-14 August.
PIAGGIO PUSHES FOR LATIN AMERICAN SALES
Piaggio expects Brazilian certification of its P180 Avanti II twin-pusher will lead to robust sales in the region.
The chief executive of Piaggio America, John Bingham, says the Avanti II is on track to be certificated by Brazil's ANAC authority in the fourth quarter of this year. Piaggio made its LABACE debut last year and used the show to gauge interest in the Avanti. Bingham says Piaggio will use LABACE 2010 to again showcase the aircraft and announce the appointment of its Brazilian dealer.
"The Brazil market is very good. The market there has gone through no recession. Our airplane is extremely well suited to the geography of Brazil and distances in Brazil. As a result we think there's a huge opportunity in Brazil," Bingham says.
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© PiaggioPiaggio expects to certificate the Avanti II in Brazil this year |
Piaggio is represented in one Latin American market only - Venezuela, where it has had a dealer since early this year, but has not yet placed an aircraft. Bingham says certificating the Avanti II in Brazil and appointing a local dealer and service representative is the first part of an overall plan to significantly increase the Italian manufacturer's presence in the fast-growing region.
He says Piaggio is also close to appointing a dealer for Mexico and is now looking at appointing dealers in Argentina, Chile and Colombia. Bingham says concluding some of the new Latin American partnerships "will fall into the next year. Brazil is our key focus because the potential is so big." He says Brazil accounts for two-thirds of the total business aviation market in South America.
Bingham says the delivery of a pre-owned Avanti in early August to a Mexican customer will mark the return of the type in the region since an aircraft left the Chilean market several years ago. Bingham expects the first Avanti II to be delivered to Brazil in early 2011. The first Venezuelan delivery and first new aircraft for Mexico is also expected in 2011.
EMBRAER TO GROW REGIONAL SERVICE NETWORK
Embraer plans to expand its business jet maintenance network in Latin America as the region's fleet continues to grow.
The manufacturer's executive vice-president of executive jets, Luis Carlos Affonso, says Embraer aims to add a service centre in north or north-east Brazil to complement the factory-owned facility it opened last year at São José dos Campos near São Paulo. Affonso says it is undecided if the new facility will be factory owned or an authorised service centre.
Affonso says that while Embraer has 38 executive jet service centres globally, only two are in Latin America - at its São José dos Campos factory and an authorised service centre in Guatemala. In addition to a second Brazilian facility, Affonso says Embraer is looking to add authorised service centres in Argentina, Chile and Colombia.
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© EmbraerThe Legacy 650 could make its air show debut at LABACE this year |
Most of Embraer's rivals already have dealers that double as authorised service centres in these countries. Cessna director of international sales Todd Duhnke says its Chilean partner, Aeroservicio, is inaugurating a new maintenance facility on 10 August, two days before the opening of LABACE 2010.
While Embraer sells direct and has its own maintenance facility for the Brazilian market, its rivals use local partners. Cessna is partnered with TAM Aviação Executiva, which sells the entire Cessna line, has maintenance facilities throughout the country and manages Citations. Hawker Beechcraft has a similar longstanding partnership with Lider Aviação.
Source: Flight International
