Page 20 - AAA MARCH - APRIL 2019 Online Magazine

[ COMMERCIAL AVIATION ]

commercial aircraft and services operations of
the Brazilian aerospace firm will be 80 percent
owned by Boeing, with Embraer holding the
remaining 20 percent. The shareholders also
Same Faces, approved another JV between the companies,
New Arena for the multi-mission medium airlift KC-390 and
this one to promote and develop new markets

other military aircraft. Embraer will have a 51
percent stake in the JV, while Boeing will hold
the remaining 49 percent.

A Sound Partnership
EMBRAER SHAREHOLDERS APPROVE THE While there never has been a doubt about the
US$4.2 BILLION COMMERCIAL AIRCRAFT JV quality of Embraer’s new E2-series jets, the
WITH BOEING Brazilian aerospace company’s limited market-
ing muscle had prevented it from landing a deal
Arun Sivasankaran with a major airline. This will change now that
the JV will have the backing of Boeing’s cus-
Not so long ago, there were two separate markets in the com- tomer base and its sales force. With Boeing in
mercial aircraft business and two distinct duopolies. In an aviation charge, the JV is also expected to be success-
landscape that has changed drastically in less than a year, only ful in changing the “scope clause” provisions
two big players remain, and they will battle between themselves in US pilots’ contracts that currently prevent
for supremacy in both the markets. the use of the E175-E2 by regional partners of
The tussle between Boeing and Airbus for the regional jets major airlines.
market, one that they had left to Bombardier and Embraer earlier,
is expected to heat up in 2020 and beyond, now that Embraer BOEING WILL LOOK TO BENEFIT
shareholders have approved the US$4.2 billion commercial air- FROM EMBRAER’S STRENGTH IN
craft joint venture with Boeing. The approval clears the way for
the completion of the deal by the end of the year. AFTERMARKET SERVICES, WHERE
After the Airbus Bombardier C-Series agreement, it was just a ALMOST 60 PERCENT OF E JET
question of when rather than if Boeing would work out an agree- CUSTOMERS HAVE SIGNED ON FOR
ment with Embraer. Although the two joint ventures announced THE COMPANY’S MAINTENANCE
in July last year between the two plane makers ran into choppy
waters early on after a federal judge in Brazil blocked Embraer’s PROGRAMMES
board from signing on the dotted line with the American aviation
giant, it should be smooth sailing from now, with only antitrust With the JV, Boeing will want to more than just
approvals required before the JV starts operation. Boeing fore- be successful in making a dent in the regional
casts the JV will generate US$150 million in annual savings by jets market; the company will look to benefit
the third year. from Embraer’s strength in aftermarket services
As per the terms of the deal, the joint venture (JV) comprising the that has seen almost 60 percent of Embraer’s

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