Embraer now must sell its service
Not new to supporting airline customers the world over, Embraer must nevertheless convince the business aviation community about its seriousness in competing not only on product quality, but support capability as well. It apparently has chosen this NBAA to showcase that commitment by announcing plans to spend some $40 million to open four new service centers specifically to cater to its own business jet line and realign its present support network and parts logistics organization.
The new centers, slated for placement at Bradley Airport in Windsor Locks, Conn.; Williams Gateway Airport in Mesa, Ariz.; near Embraer’s executive jet division headquarters in Fort Lauderdale, Fla.; and at Paris LeBourget Airport, will open in mid-2008, right around the time Embraer expects its new Phenom 100 and Lineage 1000 to reach the market. Embraer vice president of Executive Jets Luis Carlos Affonso estimated that the company would hire about 15 employees at each location to start the operations.
Embraer has also announced a deal to warehouse a cache of parts at UPS’s hub in Louisville, Ky., from where the package delivery specialist will provide same-day delivery with its SonicAir service. The Embraer board has already approved the release of funds for all the parts, Affonso said.
Finally, Embraer has agreed to enter into a joint venture with Canada’s CAE to open a network of training centers for pilots, mechanics and dispatchers for the Phenom 100 and 300. Under the terms of the deal, Embraer will maintain a 51-percent interest in the joint venture. Although it hasn’t settled on all the locations, the first simulator will be installed in CAE’s SimuFlite facility in Dallas in time to prepare pilots and mechanics for Phenom 100 certification in mid-2008. It plans to place another facility in Europe in 2009, followed by a second U.S. center, tentatively in Florida, in 2012.
Embraer plans to tailor each student’s training regime to his or her level of experience. “We might recommend that he or she do jet transition training first, for example,” said Affonso. “Or we may recommend that they fly more hours in the sim or flight training device if the student is not used to a technically advanced airplane. It will take as long as is required. There are no pressures; the quality of the training is what is important.”
Although Embraer employs a network of 13 authorized service centers in the U.S. to support the 38 Legacy 600s flying throughout the country, it will need to extend its offering exponentially once the 300 or so Phenoms it has sold start darkening the skies. Affonso noted that at the end of this year’s second quarter, Embraer had collected nonrefundable deposits for 235 Phenoms. In the third quarter alone, it added another 65. Meanwhile, Legacy sales have raised Embraer’s market share to 13.5 percent; this year it expects to deliver between 25 and 30 airplanes, compared with the 20 it rolled out of the factory last year.
In the U.S., part of the “realignment” plan includes segregating Embraer’s business aviation support activities from the commercial side at its owned center in Nashville, Tenn. So far it has signed eight companies to act as authorized service centers for the Phenom in the U.S. All told, by mid-2008 it expects to have 45 service centers throughout the world, including new, still unidentified facilities in the Asia-Pacific region, sub-Saharan Africa and the Indian subcontinent.
Further initiatives include a new call center by the end of the year, a Web portal by the middle of next year and the evolution of the call center into a so-called contact center by mid- to late 2008. The contact center will act in a more proactive fashion than a traditional call center, communicating with customers in anticipation of needs rather than waiting for problems to occur. The same philosophy extends to Embraer’s August agreement with Flightdocs to provide maintenance tracking and planning. Already the service keeps track of five Legacies.