Paul Lewis / Washington DC
Brazilian manufacturer aims to reduce dependence on regional jet market
Embraer is seeking to further expand in the defence market by leveraging its strategic relationship with the French aerospace industry, in particular competing for the Brazilian air force's F-X fighter requirement, with the long-term goal of diluting the company's overwhelming reliance on regional jet (RJ) revenue.
"Today RJ airline revenue represents about 88% of total earnings. We get just 2.5% from the defence sector and the remainder from customer service and corporate business markets. We intend for these three other sectors in the future to represent some 25% of our total earnings," says Mauricio Botelho, Embraer chief executive.
While customer service revenue will expand exponentially with the growth in the number of RJ deliveries, now approaching 450 ERJ-135/145s, Embraer expects the corporate aircraft market to remain a niche business. The company is expecting sales of its ERJ-135-based Legacy aircraft to total 240 aircraft over the next 10 years.
The main focus of Embraer's diversification effort is on defence and better exploiting its 20% ownership by French industry. Embraer is already working with Thales on special mission versions of its RJs, such as the EMB-145MP maritime patrol aircraft and SA airborne early warning jet and hopes for a "deeper defence relationship" with EADS.
"The main purpose for our association with Dassault, which also brings together Snecma, is the F-X programme. We intend to develop a new version of the Mirage 2000-5 Mk2 called the 2000BR which in some aspects will be more advanced than the current fighter. The aircraft will be integrated and manufactured in Brazil," says Botelho.
To this end Embraer has signed two agreements with Dassault and Snecma encompassing full technology transfer, including software, claims Botelho, and a marketing agreement covering Brazil and the neighbouring region. "It assigns us export rights to other countries in South America, where there are currently 200 Mirage aircraft approaching obsolescence," says Botelho.
The company has secured a $200 million order to begin modernising the Brazilian air force's Northrop F-5BRs, and has teamed with Alenia to compete for an expected AMX upgrade. A production contract for an initial 50 ALX Super Tucanos is also planned.
Source: Flight International