Embraer rolls out 190; 170 approval imminent

 - March 16, 2007, 2:51 PM

In front of more than 1,000 guests, including Brazilian president Luiz Inácio Lula da Silva and many of the country’s top government officials and executives, Embraer rolled out the first Embraer 190 on February 9 at its São José dos Campos plant. The airliner, which seats up to 108 passengers, is the largest aircraft ever produced by the Brazilian manufacturer. “The Embraer 190 has all of the necessary attributes to strengthen our position in global markets and to keep Embraer on a continuous path of growth,” said CEO Mauricio Botelho.

Brazil’s president, a former factory worker, said, “Embraer has shown the world our capacity to compete and we are showing that Brazil is a modern country with scientific and technological know-how.”

Botelho said his company expects the 190 to receive certification by the third quarter of next year, as originally scheduled. Flight testing was due to begin late last month and Embraer plans to finish building three more aircraft shortly. The Embraer 195, which will be the largest aircraft in the new family, is expected to be certified during the first quarter of 2006.

To date, Embraer has received firm orders for 110 Embraer 190s and holds options for 150 more. According to Botelho, negotiations with Air Canada have advanced and the company expects to sign a contract for 45 aircraft with options for an additional 45 in “the coming weeks.” Embraer is the only manufacturer that plans to produce aircraft of the 190’s size and weight class, which helped the company beat its main competitor, Bombardier, on the Canadian company’s home turf.

Botelho said negotiations over Embraer 175s with India’s Jet Airways have resumed and that he is confident that the airline is waiting for the “right moment to move ahead with the contract.”

JetBlue CEO David Neeleman, who also attended the rollout of the Embraer 190, said his company holds “great hopes” for the new aircraft. “We have identified 1,000 different city pairs in the United States that the 190 would serve,” he said. In addition to seasonal routes, JetBlue could increase the number of cities it serves from New York City from 20 to 50 with the introduction of the 190, he added. Neeleman declined to specify the exact routes.

The Embraer 190 is powered by two General Electric CF34-10E turbofans and is the first aircraft in the series to use wings built at Kawasaki’s new plant in Gavião Peixoto, Brazil. According to Embraer, the 190 will allow a turn-around time of only 17.8 minutes.

Likewise, the new Embraer will need only 4,524 feet of runway to land and 6,506 feet to take off, making it possible to use the aircraft at regional airports. The aircraft can fly 2,200 nm at 448 knots.

Birth of a New Family
It was in June 1999 that Embraer began developing the new family of jets, which includes the 170 series, after the company identified a market niche unoccupied by existing aircraft. Embraer projects a demand for 1,250 aircraft within the 91- to 120-passenger range over the next 10 years. Embraer and its 16 partners in the project have invested roughly $1 billion in the new family of jets, and it has firm orders for 245 such aircraft and options for 305 more.

The first aircraft in the family to be completed, the Embraer 170, received provisional certification in November, but the aircraft’s fly-by-wire flight-control system, developed by Honeywell, has delayed final certification and prevented Embraer from delivering any of the aircraft yet.

Despite myriad delays in the certification process for the 170, Embraer vice president Frederico Fleury Curado said the company expected to receive final certification for the Embraer 170 on February 20. “Our engineers left a recent meeting with FAA and JAA officials confident in the results and everything indicates that there won’t be any further delays,” added Luiz Carlos Affonso, Embraer’s vice president of engineering and new product development. The company already has several aircraft ready for delivery immediately following final certification.

Embraer expects to deliver several Embraer 170s to US Airways, Poland’s LOT and Alitalia as soon as it wins certification. Under the most recent publicly divulged delivery estimates, US Airways would receive 35 to 45 Embraer 170s before year-end, and Alitalia will receive another six.

Curado also said the company does not expect any cancellations, despite the much-publicized financial and labor-relations problems at US Airways. While the company hopes to begin delivering between four and five 170s per month by year-end, it has slowed development of the 78- to 86-passenger 175 in reaction to “market conditions,” forcing a certification delay from the third to the fourth quarter of this year. With the introduction of the 170/190 series, Embraer expects to deliver 160 aircraft this year and 170 next year, up significantly from the 103 aircraft it delivered last year. To meet the demand for new aircraft, Embraer plans to hire another 1,000 employees next year.

According to Botelho, international aircraft financing has begun to show signs of recuperation, and Embraer appears poised to take advantage of recovery in the market. Botelho announced that Embraer plans to invest $2 billion over the next five years, a significant increase over the $1.7 billion spent since 1995. Botelho did not specify how the money would be spent, but he said a majority of the funds will go to new products and improvements in productivity and quality. He did say, however, that Embraer does not harbor plans to build an aircraft larger than the 195.