Embraer is experiencing a moment of grace after years of uncertainty. The financial market chose the Brazilian aircraft manufacturer as a beacon of hope amid problems in the production chain, especially at Boeing.
In addition to the rising shares, Embraer is the target of speculation about a potential new airliner capable of competing for orders with the Boeing 737 and the Airbus A320.
The company has frequently denied these rumors, but they insist on returning to the spotlight, fueled by sources that indicate that the project may be taking shape.
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There is, however, one certainty: Embraer does not have the funds to finance an audacious project like this alone. And that’s where potential partners come in.
Alliances around the world
Since the joint venture with Boeing failed in 2020, Embraer has undergone extensive restructuring, seeking greater efficiency and expanding the focus of its business, which ranges from commercial aircraft to executives, military programs and also services.
The strategy is yielding good results, but sales of the E2 family of commercial jets are still below their potential.
There are those who say that the overloaded assembly lines of Boeing and Airbus will end up unintentionally helping Embraer and the E2, however, there is no denying that the market for narrowbodies is immensely larger than that for jets with 80 to 150 seats.
Without the agreement with Boeing, Embraer was left to search for other countries that, like Brazil, yearn for greater space in the market for more complex aircraft.
India, with its huge population and growing air passenger traffic, is one of them. Embraer reached an agreement with Mahindra, a large local group, to offer the C-390 Millennium to the local air force.
Although it is a military program, Millennium could be the spearhead for a broader industrial project, which includes civil aircraft.
Another nation that is seeking a leading role in the industry is Saudi Arabia. The country’s government wants to diversify the economy so as not to depend on oil and an aircraft factory is one of the paths considered.
As in India, Embraer also signed memoranda of understanding with the Saudis, in this case, a state investment fund. Again the initial focus is the C-390, which is competing for an order from the air force, but nothing prevents conversations from evolving to other aircraft.
Is Japan the hot ticket?
Embraer has also established good relations with the Netherlands, Portugal, Turkey and South Korea, but there is a new country on the horizon, according to The Air Current, Japan.
The rich Asian country, once one of the most advanced in the aviation industry, was left on the sidelines after World War II.
Although it has developed some aircraft and today Honda is successful with the HondaJet business jet, the Japanese presence in aviation is discreet.
Mitsubishi’s SpaceJet program aimed to put the country in competition for the regional aircraft market but ended up succumbing to debt and operational problems.
But the Japanese government did not give up and this year launched a new challenge to the industry to build an advanced passenger aircraft and possibly larger than the SpaceJet.
It is in this context that a partnership with Embraer could evolve in every way. What market knowledge the Brazilian company has left, the Japanese lack, who, on the other hand, have extraordinary financial and manufacturing resources.
According to the outlet, Embraer is discussing aerospace projects with the Japanese government and its heavy industries.
For airlines and lessors, a third narrowbody manufacturer would be news to be celebrated. Currently, the market is experiencing a worrying imbalance, with an Airbus in high demand and a Boeing in a reliability crisis.
Having another option to equip your fleets would mean a healthier and more efficient air travel market. It remains to be seen whether there are more people willing to create this third way.