Embraer Ships Five Airliners in Q1 amid Boeing ‘Carveout’

 - May 12, 2020, 8:19 AM

Embraer delivered just five airliners during this year’s first quarter, underscoring the company’s inability to generate significant revenue during its commercial aircraft division’s “carveout” from the rest of the company in preparation for its expected sale to Boeing.

Embraer delivered three E175s, one E190-E2, and a single E195-E2 during the period, while negotiations with Boeing stalled over certain “unsatisfied conditions” related to the planned sale of 80 percent of Embraer Commercial Aviation.

While the unresolved conditions related to the sale’s master transaction agreement remains a matter for speculation, Embraer’s interest in seeing the deal close as soon as possible while potential customers hesitated to pursue E-Jet acquisitions, even before the Covid-19 crisis took hold, seemed clear. Not only did the carveout—largely involving preparations for merging the two companies’ information technology systems—shut down the final assembly line for weeks, but sales contracts came to a virtual halt as potential customers waited for the consummation of the deal before moving ahead with purchases.    

“Certain airlines want more visibility on the transaction before they're prepared to move forward with their fleet planning,” Embraer Commercial Aircraft CEO John Slattery told AIN in February. “We are hearing increasingly that airlines are getting a little frustrated. They want some surety around what the future is going to look like so they can plan accordingly. So we understand that frustration. We're doing everything we can to get our transaction closed so that we can get back to the day job, which is designing new aircraft, building fine aircraft, and servicing them in the marketplace.”

Embraer has vowed to pursue “all remedies” for damages it claims to have incurred as a result of Boeing’s actions.