With Boeing buying into Embraer and Airbus Bombardier, these over scope aircraft will wind up flying somewhere, hopefully at the majors. And seriously, even Boeing knows their smaller 737s aren't economical enough to compete against the jumbo RJs. Cheaper and faster for them to buy an existing design that can fill that niche rather than to design a new competitor from the ground up.
Boeing referred to comments by chief executive Dennis Muilenburg in February, saying the timing was right for the companies to combine forces and a tie-up would be “a great strategic fit, but it’s not a must do.”
While the broad outlines of a deal seem to have satisfied all parties’ main concerns, there are finer points to settle between the companies, whose partnership in the 70- to 130-seat regional jet segment would mean stiffer competition for Bombardier Inc (BBDb.TO) and Airbus SE’s (AIR.PA) CSeries program.
For example, negotiators still need to define Boeing’s final stake in a new joint venture containing Embraer’s commercial aviation business, which is likely to be just over 80 percent in return for a cash payment, according to two of the sources. It was still unclear if Embraer would have a seat on the board of the new company, they added.
But they said key government concerns are addressed in the plan, which ensures that Embraer, which would keep its defense and business jet divisions, retains the engineering capacity necessary to design and build new aircraft. Long-term service agreements between Embraer and the new company should also guarantee their long-term viability, sources said.