LABACE Convention News

Embraer Headlines LABACE with Legacy 650E

 - August 14, 2017, 10:00 AM
Blending all the different shades of blue on Embraer’s Legacy 650E prototype took 15 days of preparation and paint work. The metallic silver adds an elegant and rich tone to the overall effect.

Embraer Executive Jets (EEJ) is debuting its upgraded Legacy 650, the 650E, at LABACE 2017 this week (Static 5115). The event marks the first time the aircraft has been displayed at an airshow anywhere, and to mark the occasion the manufacturer has created a unique paint scheme. The aircraft was flown into São Paulo’s Congonhas Airport, where LABACE is being held, on Sunday afternoon and is the central feature of the static display. Other Embraer aircraft joining the 650E are a Phenom 100EV, Phenom 300, Legacy 450 and Legacy 500. Only the Lineage will be missing, though fitting such a large aircraft into the show’s constrained static display area could be a challenge.

Last Friday, as Embraer prepared for LABACE, AIN visited the company’s headquarters in São Jose dos Campos, northeast of São Paulo. Following a tour of its Heritage Center and assembly lines for both the Legacy 450/500 and the commercial E-Jets (including one of the latest 195 E2 prototypes that was recently at the Paris Air Show sporting a distinctive Eagle paint scheme on its nose), senior v-p executive jets Luciano Froes explained Embraer’s view’s on the market.

“The market continues to be U.S. and Europe-centric," he said, "[these two] accounting for 80 to 85 percent of the total demand, and 85 percent of 2016 deliveries.” He believes that 2017 is presenting “a fairly flat market,” noting that “GAMA numbers point to this too—around 650 [business] aircraft worldwide.

“But in terms of sentiment there are some indications of a recovery: higher corporate profits, tax reform and there is a pent-up demand, with average aircraft age up to eight years from six, stock markets are high and the number of high-net-worth individuals is at a high number,” said Froes, who is based at Embraer’s Melbourne, Florida plant. At Melbourne Embraer builds all Phenom 100s and 300s, and is starting to produce Legacy 450/500s as well.

Froes added that new products such as Embraer's fly-by-wire Legacy 450/500 models are also “stimulating demand as you can’t get them in the secondhand market.” He acknowledged, however, that there is a “headwind” due to the active pre-owned market, with “an almost four-to-one ratio of used to new sales.” But as used aircraft are absorbed, Froes predicts many customers will “go back to new.” He also said residual values had become more stable thanks to reduced available inventory.

He noted the average annual number of worldwide business jet deliveries in the market over the past 10 years has been only 756 aircraft (more or less flat since 2009, and with only 652 in 2016). This was after 1,300 deliveries in 2008. However, Froes highlighted how Embraer had during that time grown its fledgling executive jet division to become a major player in the market. The company launched the Phenom 100 and 300 in 2005, followed by the Lineage in 2006 and Legacy 450 and 500 in 2008.

“We’ve now delivered [more than] 1,100 business jets, a pretty significant achievement against overall market figures," he said. The company has more than 700 customers in over 70 countries now, 44 percent in North America and 26 percent in Latin America (against 19 percent in Europe). “We are very well represented here in Brazil,” said Froes. “Being a household name here helps.”

Desired Brand

Explaining Embraer’s updated vision, Froes said the company wants to be “the most desired brand in business aviation. That’s our ‘North Star’ vision.” There are three fundamental pillars to the company's strategy: “Everything starts with the customer, at the center, the other two are our employees, leveraging their talent, and the shareholders.” The Brazilian government owns a “golden share” in Embraer, but this only acts as a check in fundamental decisions not related to product development or everyday activities.

Froes said that further broadening support was central, with the company’s creation of a fourth business unit, Embraer Global Service and Support, last December being key. Led by Johann Bordais (as president and CEO of that unit), it covers service and support activities for the company's three other business units ( commercial, executive and defense).

Bordais and his team are formulating details of how service and support as it relates to executive aviation would be shaped in the future. However, Froes said that support is already global with service centers in locations such as Paris and Connecticut, Arizona and Florida in the U.S., and Sorocaba (west of São Paulo) in Brazil. Embraer can boast “a little over 70” service centers around the world, including authorized service centers, he added. Sorocaba also has an FBO, though Froes declined to say whether the company may create FBOs at its other service centers.

Froes noted that EEJ had taken the overall number one spot in AIN’s Product Support Survey for the second year running, and explained how helpful this is in its sales efforts.

Summarizing, Froes said EEJ is still experiencing “very healthy business growth” that had marked its emergence as a major business jet producer, building its share from 3.6 percent to 18 percent of unit deliveries between 2005 and 2016. In that time EEJ has grown from 7 percent to 28 percent of the company’s revenues.

Latin America

AIN also met with EEJ’s v-p sales for Latin America, Gustavo Teixeira, before LABACE 2017. He said, “The appreciation of the U.S. dollar has created a bit of a headwind…[but] it’s a very interesting and important market indeed. You have around 21 countries, and every country has very specific needs for their transportation.

“Brazil, for example, has around 5,000 cities but only 130 airports you can reach using commercial flights. So how can you expand a business? Wealth is also more distributed around the country now, in small and medium-sized cities. Agribusiness is the powerhouse of the Brazilian economy.” Getting to and from cities in the northeast in particular can be very time consuming, and a jet can cut a two-day trip to a couple of hours given the lack of airline services.

Teixeira said more people are also taking to business aviation in countries such as Chile, Argentina and Colombia as they need point-to-point transportation. Their economies are looking healthier, as is confidence. He believes that the 2,300 business aircraft in Latin America “shows the strength of the region.” The fleets of Mexico and Brazil are second and third in size in the world to the U.S.

Embraer’s investment in its portfolio of jets has been paying off, Texeira said. “The Phenom 100 is the single biggest business jet fleet in Brazil, with around 90 aircraft. The first of the new Phenom 100EVs was delivered in Mexico last year and the first 100EV for a Brazilian customer was delivered recently too.

There are around 50 Phenom 300s in Brazil. Even at the top end, the Lineage has sold—for example as a corporate shuttle to mines in Mexico—but he admitted the market for that aircraft is stronger overseas at present.

Texeira said that Embraer customers often trade up; several customers that started with the Phenom 100 now operate the Phenom 300 or Legacy 500 as their businesses and need for travel have grown, while some customers move down to the Phenom 300 or Legacy 500 from larger aircraft, benefiting from lower operating costs due to the newer airplanes' more advanced technology. This, he said, is reflected in the low number of days that used examples of these aircraft remain on the market.

The mood this year seems “more positive after the recession of the past two to three years," he said. "Customers who postponed decisions are now coming back to the market. And there are areas of the Latin American economy that have not been affected by recession, especially those exporting to the U.S. and China, so they need to keep using jets and preserving their capabilities.”

Unique Legacy 650E Paint

According to Embraer, the paint scheme sported here by the Legacy 650E prototype reflects “the classic version and its heritage of robustness, combining with automation and new technology updates that make the Legacy jet a true global-desired business jet.” 

The company’s painting and design team at its headquarters in São José dos Campos, about 60 miles northeast of Congonhas, “explored a spectrum of colors, forms and possibilities to create artworks through a delicate handmade preparation executed by robotic painting perfectionists. The different shades of blue highlight the project. The dark blue, seen as powerful, integrity and safe merges gradually with the health, tranquility and softness from the light blue. The addition of metallic silver provides an elegant and rich appearance. The combination of all these tones complemented the inspiration aimed to bring into life the map of the world with the recognized attributes and characteristics of the Legacy 650 and its evolution version.”

Embraer designer Erich Shibata told AIN, “It took 15 days to prepare and paint. It took two days just to apply the template. It was one of the most difficult and technical [liveries Embraer has completed].”­

Before flying to Congonhas for LABACE and before flying to São Jose does Campos for painting two weeks ago, the 650E prototype was based at Gaviao Peixoto (180 miles northwest of Congonhas), home of flight testing activities including the new E2 commercial jets and KC-390 airlifter. This is where the 650E will fly after the show, to continue testing.

Enhancing a Legacy

Embraer Executive Jets (EEJ) unveiled a new version of its Legacy 650 jet, the Legacy 650E at the NBAA show in Orlando in October 2016. Featuring automation and technology updates, the aircraft now carries a 10-year or 10,000-flight hour warranty, which it says is the longest in the business jet industry. 

With a restyled seat upholstery, the Legacy 650E’s cabin features three cabin zones designed with privacy in mind, and a separate crew lavatory in the forward cabin is offered as an option.

Fight deck refinements include synthetic vision as part the Honeywell Primus Elite Advanced Features (PEAF) package, and this also includes traffic collision avoidance system symbology overlay and Sirius XM ground-based weather information on the moving map display (for U.S. operators).

The Legacy 650E also has autothrottles as standard equipment, in response to requests from customers.

“These technologies complement the proven Legacy 650E avionics system, which is compliant with all next-generation airspace mandates and requirements,” said Embraer.

Furthermore, the EFB mounting systems have been modified so that pilots can use iPads, with all the flexibility this offers.

The Legacy 650E carries up to 14 passengers, with a galley and fully accessible in-flight baggage compartment, along with airborne connectivity and Honeywell’s Ovation Select in-flight entertainment and cabin management system.

The aircraft has a range of 3,900 nautical miles (7,223 kilometers) with four passengers, with NBAA IFR fuel reserves.

The interior warranty remains the same at two years, as does exterior paint at two years or 1,000 hours, engines at five years or 2,500 hours, APU at 5 years, 3,000 hours or 6,000 cycles, and avionics at five years or 5,000 hours.

According to EEJ senior v-p executive jets Luciano Froes, the 650E “does extremely well for charter operators, with greater than 99.4 percent dispatch reliability. It benefits from airliner DNA.”

Outlining the changes to in the 650E, Alvadi Serpa, EEJ manager of product strategy, said there were no engine or performance changes but that the price had also been reduced to $26 million from $32 million, in part thanks to the decision to drop the Legacy 600 model and find other production efficiencies. He added, “And we have renegotiated some supplier contracts. This all allowed us to revise the price to a more realistic number.”

The launch customer for the 650E is Air Hamburg, which ordered three at EBACE last May, to take its Legacy fleet to 14. The first example has been delivered already but without the autothrottles, which Embraer will install following EASA certification, which is expected soon.

Friedrich Appointed New EEJ CCO

Embraer announced yesterday that it has appointed Stephen Friedrich as chief commercial officer for the company’s executive aviation business unit. Friedrich will report to Michael Amalfitano, president and CEO of Embraer Executive Jets, and will be responsible for the direct management of the global sales organization for new and pre-flown aircraft. He will also have oversight of relationships with customers and industry collaborators.

“Stephen brings a wealth of experience in sales, marketing, finance, customer support and services, and aftermarket programs from over 30 years in the leasing and aerospace sectors,” said Amalfitano, who was himself appointed in March. “With our strategic shift to focus on value, his dynamic leadership will strengthen our global sales team and challenge us to create more comprehensive solutions for our customers to outperform.”

Friedrich’s previous position was as a senior marketing executive with Rolls-Royce, where he led the global sales team and the marketing activities for business aviation as well as forecasting and pricing of services.

“This is an exciting time to join Embraer Executive Jets as it prioritizes the value of its portfolio,” said Friedrich.

Embraer’s Stand Reflects Revised Brand Values

A large Brazilian bird symbol welcomes visitors to Embraer's display at LABACE 2017 and signals the company’s “new brand positioning… presented for the first time in Brazil in the week that Embraer celebrates its 48th anniversary, on August 19.” The bird is extracted from the company’s logo, which is a bird silhouette on a stylized E.

With the tagline “Challenge, Create and Outperform,” the brand’s new concept reflects almost five decades of history where Embraer has created “solutions and products that enable its clients to outperform,” according to the company, which added that its success has been based on “a customer-centric vision, the very same vision that drives the company for the next half century to come.”

A new visual identity was launched at the Paris Air Show in June and is reflected in a redesigned website, as well as “digital and internal communications channels, booth design, look and feel for events, business communications alignment, verbal and nonverbal communications shapes, a new brand book and advertisement pieces.”