Category Archives: Embraer

Embraer and Boeing approved the terms of strategic aerospace partnership, seek Brazilian Government approval

Embraer and Boeing have approved to the terms of a strategic partnership that would position both companies to accelerate growth in global aerospace markets.

The approved terms define the joint venture comprising the commercial aircraft and services operations of Embraer, in which Boeing will hold an 80 percent ownership stake and Embraer will hold the remaining 20 percent. The transaction remains subject to approval by the Government of Brazil, after which Embraer and Boeing intend to execute definitive transaction documents. The closing of the transaction will then be subject to shareholder and regulatory approvals and customary closing conditions.

Under the terms of the proposed partnership, Boeing will acquire an 80 percent ownership stake in the joint venture for $4.2 billion. The partnership is expected to be neutral to Boeing’s earnings per share in 2020 and accretive thereafter. Estimated annual pre-tax cost synergies of approximately $150 million are anticipated by the third year of operations.

Once the transaction has closed, the commercial aviation joint venture will be led by Brazil-based management, including a president and chief executive officer. Boeing will have operational and management control of the new company, which will report directly to Dennis Muilenburg, Boeing chairman, president and chief executive officer. Embraer will retain consent rights for certain strategic decisions, such as transfer of operations from Brazil.

“Boeing and Embraer know each other well through more than two decades of collaboration, and the respect we have for each other and the value we see in this partnership has only increased since we announced our joint efforts earlier this year,” said Dennis Muilenburg, Boeing chairman, president and chief executive officer.

“We are confident that this partnership will deliver great value to Brazil and the Brazilian aerospace industry as a whole. This alliance will strengthen both companies in the global market and is aligned with our long-term sustainable growth strategy,” said Paulo Cesar de Souza e Silva, Embraer president and chief executive officer.

The companies have also agreed to the terms of another joint venture to promote and develop new markets for the multi-mission medium airlift KC-390. Under the terms of this proposed partnership, Embraer will own a 51 percent stake in the joint venture, with Boeing owning the remaining 49 percent.

The transaction is subject to approval by the Government of Brazil, ratification by the Embraer Board of Directors and its further authorization to execute the definitive transaction documents. Once the parties have executed the definitive transaction agreements, the strategic partnership will then be subject to shareholder and regulatory approvals, as well as other customary closing conditions. Assuming the approvals are received in a timely manner, the transaction is intended to close by the end of 2019.

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Embraer E190-E2 lands at London City Airport

On July 13, 2018 an Embraer E190-E2 aircraft landed for the first time at London City Airport (LCY). The newest aircraft from Embraer, the world’s quietest and most efficient in its class, entered into service in April this year. An aircraft from Embraer’s test fleet stopped off at LCY on its way to appear at next week’s Farnborough Air Show. The visit demonstrates the importance Embraer places on being able to offer LCY capability to airlines and its intention to work with London City Airport to certify the E2 to meet customer demand, which is likely to rise as LCY increases connectivity.

 

Arjan Meijer, Chief Commercial Officer, Embraer Commercial Aviation, said, “For Embraer, London City feels like home, wherever you look, our aircraft are there. So it’s a big moment for us to bring the newest generation Embraer jet to this important European hub. We know that passengers will love the new aircraft, still with no middle seats and featuring larger overhead bins, and Londoners will also appreciate the quietness of the aircraft and its low emissions.”

London City Airport is London’s most central airport, known for its convenience and speedy passenger experience. Its location means operating aircraft have to be compatible with the airport’s steep approach and short runway. Embraer aircraft are well suited to this and have operated from LCY since 2009, when BA Cityflyer started operations with the E170. Embraer aircraft accounted for nearly 60% of departures from LCY in 2017.

 

Richard Hill, Chief Commercial Officer at London City Airport, said: “to welcome the Embraer E2 to London City Airport for the first time is a crucial milestone towards certification and subsequent commercial operation at London’s most central airport. The first generation of E-Jets have been intrinsic to London City’s growth, so much so that up to three quarters of all passengers now land or depart on the aircraft. As we continue a £480m transformation, due for completion in 2022, the E2 has enormous potential for London City, with proven ability to operate with less noise, fewer emissions, and better fuel efficiency to open up new destinations, delivering significant benefits for our airline customers, passengers and local neighbors.”

 

In certification testing EASA figures confirmed the E190-E2 has the lowest noise levels among all new generation single aisle aircraft. If this performance can be replicated in the operational environment of London City Airport, the E190-E2 would meet the minimum noise restrictions of the airport’s new Aircraft Noise Categorisation Scheme (ANCS), which will be fully introduced next year. The E190-E2 is the first of a new generation of crossover narrowbody jets from Embraer. The aircraft entered into service with Norwegian carrier Widerøe in April.

 

The E195-E2 goes into service next year with Azul in Brazil. The E190-E2 cuts fuel burn by more than 17%, and is the quietest passenger jet in the world today both in the cabin and outside.

 

Since entering revenue service, the E-Jets family has received more than 1,800 orders and over 1,400 aircraft have been delivered. Today, E-Jets are flying in the fleet of 70 customers in 50 countries. The versatile 70 to 150-seat family is flying with low-cost airlines as well as with regional and mainline carriers.

Photo: Embraer.

Boeing and Embraer together: Strategic partnership MOU signed

Boeing and Embraer announced they have signed a Memorandum of Understanding (MOU) to establish a strategic partnership that positions both companies to accelerate growth in global aerospace markets.

The non-binding agreement proposes the formation of a joint venture comprising the commercial aircraft and services business of Embraer that would strategically align with Boeing’s commercial development, production, marketing and lifecycle services operations. Under the terms of the agreement, Boeing will hold an 80 percent ownership stake in the joint venture and Embraer will own the remaining 20 percent stake.

“By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies’ customers, employees and shareholders – and for Brazil and the United States,” said Dennis Muilenburg, Boeing’s Chairman, President and Chief Executive Officer. “This important partnership clearly aligns with Boeing’s long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans,” Muilenburg said.

“The agreement with Boeing will create the most important strategic partnership in the aerospace industry, strengthening both companies’ leadership in the global market,” said Paulo Cesar de Souza e Silva, Embraer Chief Executive Officer and President. “The business combination with Boeing is expected to create a virtuous cycle for the Brazilian aerospace industry, increasing its sales potential, production, creating jobs and income, investments and exports, and in doing so, adding more value to customers, shareholders and employees.”

The transaction values 100 percent of Embraer’s commercial aircraft operations at $4.75 billion, and contemplates a value of $3.8 billion for Boeing’s 80 percent ownership stake in the joint venture. The proposed partnership is expected to be accretive to Boeing’s earnings per share beginning in 2020 and to generate estimated annual pre-tax cost synergies of approximately $150 million by year three.

The strategic partnership will bring together more than 150 years of combined leadership in aerospace and leverage the two companies’ highly complementary commercial product lines. The partnership is a natural evolution of a long-standing history of collaboration between Boeing and Embraer over more than 20 years.

On finalization, the commercial aviation joint venture will be led by Brazil-based management, including a President and Chief Executive Officer. Boeing will have operational and management control of the new company, which will report directly to Muilenburg.

The joint venture will become one of Boeing’s centers of excellence for end-to-end design, manufacturing, and support of commercial passenger aircraft, and will be fully integrated into Boeing’s broader production and supply chain.

Boeing and the joint venture would be positioned to offer a comprehensive, highly complementary commercial airplane portfolio that ranges from 70 seats to more than 450 seats and freighters, offering best-in-class products and services to better serve the global customer base.

In addition, both companies will create another joint venture to promote and develop new markets and applications for defense products and services, especially the KC-390 multi-mission aircraft, based on jointly-identified opportunities.

“Joint investments in the global marketing of the KC-390, as well as a series of specific agreements in the fields of engineering, research and development and the supply chain, will enhance mutual benefits and further enhance the competitiveness of Boeing and Embraer,” said Nelson Salgado, Embraer’s Executive Vice President, Financial and Investor Relations.

Finalization of the financial and operational details of the strategic partnership and negotiation of definitive transaction agreements are expected to continue in the coming months. Upon execution of these agreements, the transaction would then be subject to shareholder and regulatory approvals, including approval from the Government of Brazil, as well as other customary closing conditions. Assuming the approvals are received in a timely manner, the transaction is expected to close by the end of 2019, 12-18 months after execution of the definitive agreements.

“This strategic partnership is a natural evolution of the long-standing history of collaboration between Boeing and Embraer on a range of aerospace initiatives over almost three decades,” said Greg Smith, Boeing Chief Financial Officer and Executive Vice President of Enterprise Strategy & Performance. “It is aligned with Boeing’s enterprise strategy of pursuing strategic investment opportunities where they demonstrate real value and accelerate our organic growth plans. This partnership will strengthen the vertical capabilities of Boeing and enhance value for our customers through the full lifecycle of industry-leading products and services.”

Boeing and Embraer will benefit from a broader scale, resources and footprint, including global supply chain, sales and marketing, and services network, which will enable them to capture benefits from best-in-class efficiencies across the organizations. Additionally, the strategic partnership will provide opportunities to share best practices in manufacturing and across development programs.

The transaction will have no impact on Boeing and Embraer financial guidance for 2018 or Boeing’s cash deployment strategy and commitment to returning approximately 100 percent of free cash flow to shareholders.

Embraer E190-E2 is granted certification by ANAC, FAA and EASA

The new Embraer E190-E2 at Farnborough

In a ceremony held on February 28, 2018 at the Company’s facilities in São José dos Campos, Embraer received Type Certificate for the E190-E2, the first member of the E-Jets E2 family of commercial aircraft, from the Brazilian Civil Aviation Agency (Agência Nacional de Aviação Civil – ANAC), the FAA (Federal Aviation Administration) and EASA (European Aviation Safety Agency). It is the first time that an aircraft program with the level of complexity of the E2 receives a type certificate from three major worldwide certification authorities simultaneously.

Photo Above: Embraer.

It took just 56 months from program launch until the E190-E2 was certified. The E190-E2 features new ultra-high bypass ratio engines and a completely new wing and landing gear. Compared to the first-generation E190, 75% of the aircraft systems are new.

The flight test program comprised four prototype aircraft which were subjected to rigorous testing. The E190-E2 test fleet completed over 2,000 flight hours. Some 45,000 hours of tests were conducted in laboratories with rigs for aircraft avionics, flight controls, and electrical, hydraulic, and environmental systems.

Widerøe, the largest regional airline in Scandinavia, is the first airline in the world to receive the brand-new E190-E2 and will put the aircraft in revenue service in April. The airline has a contract for up to 15 E2 family jets consisting of three firm orders for the E190-E2 and purchase rights for 12 further E2 family aircraft.

Embraer recently announced some final flight test results confirming the E2 as the most efficient single-aisle aircraft on the market. In fuel consumption, the E190-E2 proved to be 1.3% better than originally expected, a 17.3% improvement compared to the current- generation E190.

The E190-E2 also becomes the most environmentally friendly aircraft in its class, with the lowest levels of external noise and emissions. Flight test results also confirmed the E190-E2 to be better than its original specification in takeoff performance. The aircraft’s range from airports with hot-and-high conditions, such as Denver and Mexico City, increases by 600 nm compared to current-generation aircraft. Its range from airports with short runways, such as London City, also increases by more than 1,000 nm allowing the aircraft to reach destinations like Moscow and cities in the north of Africa.

The E190-E2 will also have the longest maintenance intervals among single-aisle aircraft with 10,000 flight hours for basic checks and no calendar limit for typical utilization. This means an additional 15 days of aircraft utilization over ten years compared to current generation E-Jets. Another key gain is with pilot transition training time. Pilots of current-generation E-Jets will need only 2.5 days of training and no full flight simulator to be qualified to fly an E2.

Embraer is the world’s leading manufacturer of commercial jets 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 more than 1,800 orders and 1,400 deliveries, redefining the traditional concept of regional aircraft by operating across a range of business applications.

Top Copyright Photo: Embraer ERJ 190-300STD (E190-E2) PR-ZEY (msn 20001) (E2 FleetSmart) FAB (Antony J. Best). Image: 933758.

Reuters: Boeing proposes up to 90% stake in new Embraer venture

From Reuters:

Boeing has presented a plan to Brazil’s government that would give it an 80 to 90 percent stake in a new venture encompassing Embraer SA’s commercial jet business, a Brazilian newspaper reported on Tuesday.

The plan Boeing presented to the government on Thursday would let it take over Embraer’s commercial operations via the creation of a new company, with defense operations remaining under the Brazilian planemaker’s control in order to meet government demands, Valor Economico reported, without citing a source.

Reuters previously reported on Friday that Boeing was seeking approval in Brasilia for a plan creating a new joint company excluding defense operations.

Valor reported that under the proposal Boeing would pay Embraer in cash when the commercial assets are transferred to the new company, with most of the proceeds then distributed to shareholders as dividends.

Read the full report: CLICK HERE

Boeing and Embraer confirm discussions on potential combination

Boeing issued this statement:

The Boeing Company and Embraer have confirmed the two companies are engaged in discussions regarding a potential combination, the basis of which remains under discussion.

There is no guarantee a transaction will result from these discussions. Boeing and Embraer do not intend to make any additional comments regarding these discussions.

Any transaction would be subject to the approval of the Brazilian government and regulators, the two companies’ boards and Embraer’s shareholders.

Embraer rolls out the E195-E2

In a ceremony held on March 7, 2017 at the Company’s facilities in São José dos Campos, Embraer presented the largest aircraft of the second generation of the E2-Jets family, the most efficient aircraft in the single aisle jet market: the E195-E2 (PR-ZIJ). With the first flight scheduled for the coming months, the jet is expected to enter into service in the first half of 2019.

The E195-E2 has three additional rows of seats, when compared to the current generation E195, and it can be configured with 120 seats in two classes of service, or up to 146 in a single class. The aircraft also has a significant increase in range of 450 nautical miles, which allows trips of up to 2,450 nautical miles.

The aircraft has a dedicated wing, with the highest aspect ratio among single-aisle jets, increasing fuel efficiency. In addition to a more balanced specification, Embraer applied over 17 million hours of flight experience on today’s E-Jet fleet of over 1,300 units to come up with the optimal E2 design. For example, being designed with an intelligent combination of materials, the E195-E2 can carry 10% more passengers than a direct competitor and still have the same weight.

Embraer will use two aircraft for the E195-E2 certification campaign. The first prototype will be used for the aerodynamic and performance tests. The second prototype, which will also make its inaugural flight by the end of this year, will be used for the validation of maintenance tasks and of the interior.

Since its launch, the E2 program has reached 690 commitments, 275 of which are firm orders and 415 of which are options and purchase rights, from both airline customers and leasing companies. Currently, the E-Jets are operating with about 70 customers in 50 countries, being the global leader in the segment of aircraft with up to 130 seats, with over 50% market share.

With an investment of $1.7 billion (USD), the E2 program was launched in June 2013 and reinforces Embraer’s commitment to continuously invest in its commercial aviation products as well as maintain market leadership in the segment of 70 to 130 seats.

Photos: Embraer.