Embraer bizjets take off while E-Jets flourish

 - July 3, 2008, 4:46 AM

Embraer is here at Farnborough exhibiting a Legacy 600 demonstrator and mock-ups of its new Phenom 300 and Lineage 1000 business jets. While the 10- to
16-seat Legacy 600 is currently its only executive jet in service, the Brazilian manufacturer is preparing to have a family of six business aircraft by 2013. Income from this market is projected to increase from the current 16 percent of the group’s revenues to 25 percent in 2010.

The four-seat Phenom 100 very light jet and the large-cabin Lineage 1000 will be delivered this year, followed by the nine-passenger Phenom 300 light jet at the end of 2009. Meanwhile, in May, Embraer launched a $750 million development program for the four- to eight-seat Legacy 500 and the slightly smaller Legacy 450 (formerly known as the MSJ and MLJ, respectively), which are due to enter service in 2012 and 2013.

Looking further ahead, Embraer has secured U.S. trademarks for prospective new business jet models dubbed the Phenom 200, Legacy 400, Legacy 700 and Lineage 800. This suggests that it fully intends to fill gaps between the Phenom 100 and the Lineage 1000.

According to Embraer’s market intelligence staffer Luiz Sergio Chiessi, the company has solved problems in its production process. However, its bottom line is being hit by the weak value of the dollar. Five years ago, one dollar bought 3.5 Brazilian reals but it has now fallen to around 1.5 reals.

To meet the challenge of the unstable exchange rate, Embraer plans to open a $50 million, 150,000-sq-ft assembly line for the Phenom 100/300 at Florida’s Melbourne International Airport in 2010. By 2012, the new plant is expected to produce eight Phenoms a month from subassembly kits built at Embraer’s factories in Brazil.

Last year, Embraer delivered an unprecedented total of 169 aircraft, up from 130 in 2006. The production rate has been maintained at 14 E-Jets per month.

Delays at the main São José dos Campos facility and the rapid hiring and training of 4,500 extra employees caused a dip in first quarter profits this year, as did the weak U.S. dollar. Last year, the Embraer workforce rose to a record 23,734 people, the result in part of extensions to its Gavião Peixoto and Botucatu plants. The company has also been hiring at its new service center at Paris Le Bourget Airport in France.

On June 5, Embraer delivered the 400th example of its E-Jet family of regional airliners–an E-175 to Republic Airlines of the U.S. On the same day, it delivered the first E-195 to Montenegro Airlines under a lease agreement with GECAS.

The E-Jet range includes the 70- to 78-seat E-170, the 78- to 86-seat E-175, the 98- to 106-seat E-190 and the new 108- to 118-seat E-195. Embraer has reported a $20.3 billion total backlog of 509 commercial aircraft comprising 40 E-170s, 55 E-175s, 291 E-190s and 80 E-195s, plus 915 options. Its backlog of 43 ERJ 145 aircraft, all produced at its plant in Harbin, China, are for the domestic network of HNA Group, China’s fourth-ranking airline.

Chiessi confirmed that between 195 and 200 E-Jets are earmarked for delivery this year. Embraer also will deliver 10 to 15 Phenom 100s this year, as well as 35 Legacy 600s and two of the new Lineage 1000s. Beginning in 2009, the company projects overall output will again shoot up to between 315 and 350 units, as many as 150 of which will be Phenom 100s and 300s. 

Partners Wanted for C-390

Embraer is working to put together a partnership to advance the proposed C-390 medium-sized military transport, which it began studying in April. If the program is launched, as expected, in the second half of this year, first deliveries of the $50 million aircraft would be four to five years later.

The Brazilian company, which started life as a military aircraft maker, anticipates possible demand for around 700 aircraft in this category from 77 countries. According to Fernando Ikedo, vice president of market intelligence for defense and government markets, Southeast Asia, South America and Europe are key target markets. The Brazilian air force has included the C-390 in its medium-term fleet replacement plans and has been involved in defining the new model.

Ikedo said Embraer is studying regional jet engines as prospective powerplants for the C-390. These would be positioned on a high wing, as opposed to the E-Jet’s low wing architecture.

The C-390 would enter the market between Alenia’s C-27J Spartan and the Lockheed Martin C-130 Hercules. It would be able to carry 84 troops, 64 fully equipped paratroopers or almost 42,000 pounds of cargo, or armored fighting vehicles on sectors of up to 1,300 nm at max payload. Maximum range would be up to 3,400 nm and cruise speed is targeted at 460 knots.

The C-390 would have a rear central ramp and door to facilitate loading and
unloading. It will be designed to operate on short and unpaved runways without ground support.  

Embraer Doing Its Part for the Environment

Embraer’s new environmental strategies and technologies office (ESTO) has introduced a set of measures to reduce the company’s carbon footprint. At the same time, its new Embraer Carbon Offset (ECO) program offers its business jet customers the chance to make recompense for the carbon they burn.

According to ESTO director Graciliano Campos, Embraer was the first aircraft manufacturer in the world to receive ISO 14001 and 1800 environmental certificates. The company’s rate of recycling solid waste from aircraft last year reached 84.2 percent, up from 67.5 percent in 2003. Despite a big increase in production and the workforce, water consumption per employee has fallen every year since 2001.

In the same year, Embraer replaced oil-burning boilers for those using natural gas and so reduced emissions from its facilities by 20 percent. In some processes, water-based paints have replaced solvents. Now Embraer is committed to planting 600,000 trees over a 3.6-million square mile area in the next 10 years.

The company has also developed its own 100 percent biofuel. For Campos, a mechanical engineer in hydraulic systems, the aerospace industry has “no alternative in the long term but to use non-carbon fuels to eliminate its carbon footprint.”

Embraer-led research projects include oil from Babasu and Jathopa seeds. These are abundant in Brazil but cannot be used for food. Ethanol, which also does not compete with food production and is used increasingly widely to fuel automobiles in Brazil, has been certified for use on Embraer’s Ipanema aircraft.    –J.A.