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Boeing-Embraer Deal: Brazilian Air Force Prevents Loss of National Control
12/22/2017 - 10h51
FROM SÃO PAULO
The negotiation between Boeing and Embraer is a logical market strategy after the European company Airbus entered the regional aircrafts niche market.
It will be a complex negotiation, due to the power of veto the Brazilian government has on a company considered to be strategic for the defense industry - accountable for nearly 20% of Embraer's net revenues.
Without the Brazilian Air Force (FAB), from whose rib the company was created in 1969, Embraer would not be successful in military programs.
Embraer's cargo jet, KC-390, its highest bet in the industry and which has just achieved initial operational capability, received R$ 5 billion (US$ 1.51 billion) from the Brazilian government for its development. The government has also ensured the purchase of 28 units of the aircraft.
The Swedish fighter aircraft Gripen E/F, chosen to re-equip the Brazilian fleet, will have its "made in Brazil" version manufactured by Embraer, which may benefit from the knowledge of technologies applied to supersonic equipment - useful in the future of executive aviation, for example.
Those are examples of the interaction between FAB and Embraer which make it almost impossible for Embraer to lose its national control.
Also in the military field, strengthening bonds with Boeing may become a crucial step for Embraer's ambitions in the American market, the largest in the world.
The company has already sold 26 light attack aircrafts (Super Tucano) to the USA, which use them in the Afghan Air Force against rebels. All eyes are on a future bidding for the purchase of up to 120 aircrafts by the USA, among which the Super Tucano is being considered.
Boeing is already in charge of the international marketing of KC-390, and the company is extremely influential in American military business.
Translated by ANA BEATRIZ DEMARIA
|Brazilian-made Super Tucano military aircraft|