Embraer expects its revenues from the defense sector to grow by almost a third this year, reaching approximately $650 million compared with $500 million in 2009. Its military backlog going into 2010 stood at $3.2 billion and could increase if Indonesia’s defense minister signs off on a deal for eight EMB 314 Super Tucano trainer/light attack aircraft.
But the Brazilian manufacturer’s next big defense move is the planned KC-390 military transport aircraft. This program has reached a critical junction as Embraer tries to confirm workshare agreements with prospective industrial partners and secure launch orders from countries where these companies are based.
Embraer wants to get the industrial partnership network in place no later than this time next year. It wants to have the first KC-390 flying in 2013 and the first units delivered to Brazil’s air force in 2015.
The twinjet is now in its preliminary design phase with Embraer engineers working on risk mitigation. Brazil has committed to buy “a number in the upper 20s,” according to executive vice president for defense Orlando Neto. They would replace the air force’s Lockheed Martin C-130 fleet and Neto indicated that the order could swell “into the lower 30s” to meet additional needs, such as air-to-air refueling. But clearly, Embraer is going to need export orders to make the program commercially viable, which is why the pressure is on to tie up the four or five planned industrial partnerships.
Embraer is looking to structure the KC-390 workshare around aspects of the program such as the tail, landing gear, engine and avionics suite. Neto would not comment on who the prospective partners are, but it is understood that companies from South Africa and Sweden have expressed an interest.
Government-level talks have also been held with Portugal. Here the likely conduit for the partnership would be maintenance, repair and overhaul specialist Ogma, in which Embraer holds a 65-percent stake. Portugal’s motive for buying the KC-390 would also be to replace its C-130 (four-engine) turboprop, since it withdrew from the rival A400M program in 2002.
Meanwhile, the Super Tucano program has a backlog of around 91 orders, having delivered 87 of 99 ordered by the Brazilian air force. Other customers include Colombia, Chile, Ecuador and the Dominican Republic.
Embraer has also been hoping to win what could be a breakthrough order from the U.S. for a light-attack version of the Super Tucano that could be used for counterinsurgency operations. In August 2009, the U.S. Central Command made an urgent request to buy four Super Tucanos equipped with 250-pound laser-guided bombs, as well as intelligence and surveillance equipment. Funds were provisionally reallocated from the U.S. Navy budget and the acquisition was personally backed by Gen. Stanley McChrystal, the former commander of U.S. forces in Afghanistan.
But the deal has still to be confirmed after apparently being stalled in Congress by Republican politicians from Kansas, where the rival Hawker Beechcraft AT-6B is being developed, but is not yet ready for active service in this specific role.
Also part of Embraer’s defense portfolio are airborne early warning and control platforms based on the ERJ 145 regional jetliner. India is due to take delivery of the first of three of these aircraft next year, with mission systems provided by the Centre for Airborne Studies of the Indian government’s Defence Research & Development Organization. The payload will include primary and secondary radar, satellite communications, communications and electronic intelligence systems, plus countermeasures.
Embraer also has orders for 17 intelligence, surveillance and reconnaissance platforms based on civil aircraft from the air forces of Brazil, Greece and Mexico. It has also supplied a number of Legacy, Phenom, ERJ 135 and EMB 190 aircraft fitted out as VIP transports for heads-of-state and senior government officials.