Embraer is celebrating its 50th anniversary this year and is about to undergo a massive transformation following the Boeing acquisition. Ian Harbison reports from São José dos Campos.
Although Embraer was founded in August 1969, unusually, there was an aircraft before the company. In 1965, the Ministry of Aeronautics commissioned a study from the then Aeronautical Technical Center (CTA) on the potential for medium-sized passenger aircraft in Brazil.
Known as project IPD-6504, this evolved into the EMB-110 Bandeirante, which flew for the first time on 22 October 1968. Now with a production contract from the Brazilian Air Force, a factory was established in São José dos Campos, about 80km northeast of São Paolo, where it still remains – although considerably larger.
The timing coincided with the development of commuter airlines in the US and the 15-seat Bandeirante proved to be an ideal solution. Building on this success, the larger EMB-120 Brasilia turboprop first flew in 1983, to be followed by the ERJ 145 jet family in 1995, the E-Jet family in 2002 and the E2 family from 2016.
At the same time, the company has always had a strong military business, covering trainers, attack aircraft, fighters and transports. It has also produced the Ipanema agricultural aircraft.
However, with the half-century comes a major change following an agreement with Boeing. This will see Boeing hold an 80 per cent ownership stake while Embraer will hold the remaining 20 per cent.
The commercial aviation joint venture, to be called Boeing Brazil Commercial, will be led by Brazil-based management but Boeing will have operational and management control of the new company. Embraer will retain consent rights for certain strategic decisions, such as transfer of operations from Brazil.
Another joint venture will promote and develop new markets for the multi-mission KC-390 military transport. Under the terms of this proposed partnership, Embraer will own a 51 per cent stake in the joint venture, with Boeing owning the remaining 49 per cent.
The two partners agreed to these terms in December 2018, which was followed by Brazilian Government approval in January 2019 and shareholder approval a month later.
However, current activity is centred around anti-trust immunity and the parties are working to the regulators’ timetable – so there may be months to go before completion, although it is hoped this will be by the end of this year, says John Slattery, president & CEO of Embraer Commercial Aviation and EVP at Embraer (and president & CEO designate for the joint venture, subject to board approval at the time of the transaction closing).
Also on-going is the segregation of assets and resources of the commercial aviation business from the rest of Embraer. On the change of name to Boeing Brazil Commercial, he says it can be difficult to get airline access in smaller countries, or if Embraer aircraft are not already part of the fleet, then Boeing name can help to open doors.
Rodrigo Silva e Souza, VP marketing, Embraer Commercial Aviation, says the company currently has a 29 per cent share of the market for aircraft with less than 150 seats. It had the highest book to bill ratio in the industry in 2018 at 2:3.
The customer base includes over 120 jet operators in 75 countries with around 2,000 aircraft, including the ERJ 135/145 family (plus nearly another 80 operators with 500 Bandeirante/Brasilia turboprops).
For the future, the 2018-2038 Market Outlook is forecasting 10,550 deliveries (see Table 1); split 45/55 between replacement and growth. The former includes direct replacement, 50/70-seat jet replacement and turboprop replacement.
For growth, China could be an important market as the regional airline network expands with new airports over the next 10 to 15 years. The company is pursuing CAAC certification as the hot and high performance of the E-Jet E2 suits smaller and restricted airfields in the west and north of the country.
For more developed markets, he says right sizing used to be about using smaller aircraft to replace larger jets on routes generating low load factors. These days, especially in the US, the capacity gap is growing between regionals and majors and the E2 is a good filler.
Slattery adds that US scope clause restrictions will continue and sees the E175-E1 as being an ideal solution (confirmed by United Airlines signing a contract for 20 firm aircraft and 19 options during the Paris Air Show). Slattery also notes that, for Europe, the E2 is a good replacement for the E1 and Bombardier CRJ 700/900.
KLM Cityhopper proved his point at Paris by signing an intention to acquire up to 35 E195-E2 jets, consisting of 15 firm orders with purchase rights for a further 20 aircraft. These will replace the existing E1 fleet. He adds that there are good sales opportunities in the CIS region.
On 15 April, Embraer received the Type Certificate for the E195-E2 from three regulatory authorities simultaneously from ANAC (the Brazilian Civil Aviation Agency, Agência Nacional de Aviação Civil), FAA and EASA. Delivery of the first aircraft will be made to Brazilian operator Azul in the second half of the year, followed by another aircraft to Binter Canarias of Spain.
With only six E190-E2 delivered to date since the first to Widerøe in March 2018, this may seem to be a relaxed approach. Slattery says the aircraft was certified ahead of schedule but the company wanted a smooth production ramp up. Next year will see production increase by 20 per cent, and then it will follow a ‘hockey stick’ curve.
Of course, production of the E1 family still continues (32 E170, 1 E190 and 2 E195 delivered in 1H19), with the crossover, when the E2 rate overtakes, expected in 2020. He adds that the company also wanted to carefully manage the entry into service programme for the first customers.
Another consideration is that operators have to place their previous aircraft, which is holding up Azul, despite it wanting to get hold of the aircraft as soon as possible. That entry into service will be with an aircraft that is better than its original specification.
Fuel consumption is 1.4 per cent lower than expected (at 25.4 per cent less per seat compared to the E195-E1). There was a -15EPNdB target against ICAO Stage IV noise limits but -20EPNdB has been achieved.
Maintenance costs are 20 per cent lower, thanks to intervals being extended from the target of 850 and 8,550 flight hours to 1,000 and 10,000 flight hours, generating an additional 15 days of aircraft utilisation over a period of ten years compared to E1 aircraft.
Landing gear intervals have also been extended, from 20,000 flight cycles/10 years to 22,000 flight cycles/12 years.
Embraer is also claiming that the E195-E2 has a number of advantages in comparison to its direct competitor, the Airbus A220-300; including 10 per cent lower fuel burn, 15 per cent better maintenance costs, less external noise and emissions, higher reliability and a quieter cabin with no middle seat.
Inevitably, with such a huge reorganisation, there are anomalies. One of these concerns the Support & Services division, which involves commercial aviation, business aviation and defence. This will stay with Embraer but its facilities for E-Jets at Nashville, TN, and Macon, GA, will transfer to BBC.
On the other hand, Gavião Peixoto in Brazil and OGMA in Portugal are major defence operations but also E-Jet maintenance facilities and will stay with Embraer. In fact, says Johann Bordais, CEO of support & services, both sides are taking a pragmatic approach to ensure that commercial customers will see no difference.
There is no point in replicating capabilities, so both sites will continue to work on E-Jets but the internal billing process will change.
As for future projects, Slattery says the company still thinks that a new turboprop is worth looking at, but not immediately. There is meaningful work going on in the background, but powerplant technology is the biggest challenge although hybrid engines might be good for smaller aircraft.
As part of meeting that challenge, Embraer has signed a scientific and technological cooperation agreement with WEG Automation to jointly develop new technologies and solutions to enable electric propulsion in aircraft. After laboratory testing, an EMB-203 Ipanema will be used to carry out the primary evaluation of the technology.
The first flight is scheduled for 2020. Daniel Mocyzdlower, EVP engineering & technology, says the two companies have been working together for two. The Ipanema has been chosen as the current weight of the batteries, is within the weight limits of the aircraft’s chemical load and the flight test time will be similar to a spraying operation.
One possible application for this technology is electrical Vertical Take-Off and Landing (eVTOL) operations, or urban air mobility. This falls under the remit of EmbraerX, an organisation dedicated to developing disruptive businesses that transform transportation. It is based in Melbourne, FL, with innovation teams established in Silicon Valley and Boston.
EmbraerX unveiled its latest concept aircraft at Uber Elevate 2019 and has also linked with ATech of Brazil and Harris in the USA to develop Flight Path 2030, an air traffic management concept for urban air mobility. Contrary to the current hysteria about eVTOL, with around 100 air vehicle projects being promoted, Embraer is taking a long view.
Antonio Campello, president and CEO of EmbraerX, says there will be a slow expansion of the current infrastructure with manned vehicles. The translation to autonomous operations will only happen after extensive testing. As a result, perhaps only four or five of the current projects will make it to certification.
Visit embraer.com/global/en for more information.