Brazil’s Embraer and China’s AVIC International Leasing Co., signed a memorandum of understanding today at the China International Aviation & Aerospace Exhibition in Zhuhai, China, outlining the terms of a new agreement designed to create financing opportunities for selling Embraer aircraft in the Chinese and international markets. In a statement released today, Embraer said that the value of the eventual contract could total $1.5 billion over the next five years.
One of the first Chinese leasing companies approved by China’s Ministry of Commerce and the only one in the country with aviation experience, AVIC Leasing maintains a portfolio of 62 aircraft worth more than $1.2 billion.
Embraer, meanwhile, has delivered 77 aircraft to Chinese airlines, including 38 ERJ 145s from the factory in Harbin in which the Brazilian company holds a 51-percent stake. Unfortunately for Embraer, the factory carries a backlog of just three more ERJ 145s, and the future of its joint venture with Harbin Aircraft appears to hinge on approval from the Chinese government to retool the plant to build E190s. If approval doesn’t come by the end of this year, the joint venture will likely dissolve.
Nevertheless, Embraer still sees room for Brazilian-made E-Jets in China, despite the presence of the Comac ARJ21–the Chinese-made competitor due for certification next year. A market outlook for China released by Embraer yesterday projects a 20-year demand for 950 regional jets, including 20 airplanes in the 30- to 60-seat segment, 425 in the 61- to 90-seat segment and 505 in the 91- to 120-seat category.