Boeing buys Embraer
 

https://www.cnbc.com/amp/2018/07/05/...t-venture.html

The deal took shape more than two years after the idea was first presented internally to Boeing's board and reflects a longstanding affinity between the two planemakers, a person familiar with the discussions said.
However, the pressure for a tie-up accelerated when Airbus last year announced it would take control of the CSeries jet from rival Bombardier, which had been struggling in its long-running battle with Embraer in the 70- to 130-seat segment of the market.
For Embraer, the Canadian deal put real marketing weight behind a fragile competitor, while for Boeing the transatlantic tie-up threatened to expand the revenue base and cash-generating potential of its European arch-rival.
The two deals represent the biggest realignment in the global aerospace market in decades. The new two-tier duopoly, putting Airbus and Bombardier on one side against Boeing and Embraer on the other, strengthens established Western planemakers against new entrants such as China, analysts say.

They will also partner to support the Embraer KC-390:

05 JULY, 2018 SOURCE: FLIGHTGLOBAL.COM BY: STEPHEN TRIMBLE WASHINGTON DC
Boeing and Embraer will create a joint venture to promote the KC-390 and other defence products and services for new markets and applications, the companies announced on 5 July.

The new agreement expands a six-year-old relationship between Embraer and Boeing on the KC-390 programme. A joint press release issued on 5 July includes only two sentences about the formation of the new joint venture.

“Joint investments in the global marketing of the KC-390, as well as a series of specific agreements in the fields of engineering, research and development and the supply chain, will enhance mutual benefits and further enhance the competitiveness of Boeing and Embraer,” says Nelson Salgado, Embraer's executive vice-president, for financial and investor relations.

Interesting. I wonder what they had to do to get that by the Brazilian government.

Pockets were lined no doubt.

They had to split off the military portion so Brazil could maintain control of that portion. This is for only the commercial portion although Boeing is also supporting the KC-390. With Airbus attempting to bail out flagging Bombardier sales by promoting the C-series, Boeing putting its marketing and logistics behind the new E-2s helps Embraer and hurts Airbus. It also provides Boeing with an instantly competitive product in an area Boeing has neglected for quite awhile, the 100-140 Pax medium range domestic market.

Looks like I will be flying my second Boeing product through acquisition soon.

Word is they’re working on a separate joint venture that would include the KC390, with Embraer remaining majority owner and production staying in Brazil.

I see nothing positive coming from this venture, Embraer jet customers hold on, your about to be taken for ride.

The e190 195 and vthe 737 700 just can't match the economics of the c series or the bus 319..

Boeing is still going to be caught with their zipper down ...

Got comparison stats for the E-195 E-2 and the C series? If so, it would be an interesting post. My understanding is that Embraer is the third biggest manufacturer of passenger aircraft in the world and Bombardier was about to fold until they GAVE Airbus 51% of the C-series. They are now returning to their CRJ roots apparently:


https://www.reuters.com/article/us-b...-idUSKBN1JG1JZ


https://www.bloomberg.com/news/artic...s-to-jets-rail

Yeah they were extremely over leveraged on the c-series and something like three years over the expected delivery times.

I think over on the Delta thread they were saying the C series only really out shines on the longer stage lengths.

Air baltic loves them...

21 percent better than the current 73 fleet.

https://youtu.be/2vT_jHPlXIU

Which compares how to the E-2 series?

Well air baltic claims 57 percent efficiency gains over the q400.. i know.. apples to pineapples..

There is no real world comparison yet.. embraer had to rework the wing in their development.. engines being equal, its certainly going to be a bitter battle.. hopefully the c searies is so efficient mainline will favor them instead of the rjs and this silly regional market can dry up.. i know.. i know..

The numbers I’ve seen show the E2 as closely matching the economics of the CSeries. That’s on stage lengths of about 500nm I believe.

That’s on operating economics alone. The E2s sell for a lot less money than the Cs.

The E2 is cheaper than the C-Series and it is more economical on shorter flights. Longer than 800-1,000NM is where the C-Series shines.

https://youtu.be/r5uV24hJm-A

They are optimized for different ranges. If you want an aircraft to fly 2800 miles nonstop it will be the C-series. But if all your flights are 2000 miles or less, the extra tankage is just more weight and bulk, even if it doesn't have fuel in it. The mission defines the economics as much as the airframe and engines do.

The thing killing the 175-E2s is that they are too big for scope but mainline carriers don't want to open the box of aircraft of that size class back at mainline. I expect attempts to renegotiate weight limits for scope from management.

In the end, if they are the most cost-effective for a niche, SOMEONE will fly them in it, be that someone a regional without scope restrictions (Horizon), a mainline carrier (several already flying E-190s), or somebody who has a lot of money and thinks he/she can make more by being more efficient in that niche than anyone else (Amazon Prime Air, anyone? Get your reservations and purchase tickets with our handy online app. Amazon Prime members 5% off).

It's a capitalist world out there. If everybody sees a chance to make a buck, somebody is gonna take it.

Embraer announces orders at Farnsborough
 

FARNBOROUGH: Embraer lines up deals for some 300 E-Jets

17 JULY, 2018 SOURCE: FLIGHT DASHBOARD BY: GHIM-LAY YEO FARNBOROUGH
Embraer has so far at the Farnborough air show unveiled deals covering up to 300 aircraft worth a combined $15 billion.

The deals span both the E-Jet E1 and E2 families of aircraft.

After yesterday disclosing a United Airlines order for 25 Embraer 175s, the Brazilian airframer today announced letters of intent for orders from Azul (21 E195-E2s) and Republic Airways Holdings (100 E175s with an additional 100 purchase rights), along with Wataniya Airways' firm order for 10 E195-E2s plus 10 purchase rights.

In addition, existing Embraer operators agreed to add more aircraft to their orderbooks. Switzerland's Helvetic Airways has signed a letter of intent to take 12 E190-E2s plus 12 purchase rights, intended to renew its fleet, says chief executive Tobias Pogorevc. Helvetic operates seven Embraer 190-E1s and five Fokker 100s.

Mauritania Airlines has ordered two Embraer 175s, while Danish lessor Nordic Aviation Capital (NAC) will take another three E190s.

Separately, an undisclosed customer from Spain has signed a letter of intent covering five E195-E2s: three firm orders plus two options.

"It is hard to argue that Embraer has no momentum when you have these sales numbers behind us," says the manufacturer's commercial chief John Slattery. "Today is about Embraer reaffirming its leadership in the space for up to 150 seats."

I'll get excited about this when I hear that UAL, DAL, or AAL places an order for 50 E2-195 with options for 50 more...

TO BE OPERATED ON THE MAINLINE CERTIFICATE, OF COURSE. :D

Me too. The point is, however, that Boeing is buying 80% of Embraer BECAUSE of the E-2 series. In its niche, it's at least 17% more fuel and maintenance efficient than the E-170/190 series which are themselves pretty well thought of. Now with Boeing putting their marketing, financing, and support system behind Embraer,it is very likely to really take off.

Whereas Airbus rescued the C-series for bombardier, Embraer had a highly successful business even before Boeing joined up with them. With the sort of synergy a huge partner can provide, Embraer is poised to make big gains. IMHO anyway.

Currently with the new pay rates and training costs the 175 CASM is anemic. The legacy operators are bleeding money to keep the 175 mainline flying alive.

The 175 was a hit when you could fly ewr to Houston or Austin when flight loads were light, the monkeys up front made peanuts and revenue per seat mile was ok..... now with higher labor charges and gas the 175 is becoming a dinosaur and will be relegated to the 50 seat flying routes.. think clt to pgv or dfw to abi.

Kirby at united loves the 175 the feels it weakens his mainline labor group. This he publicly said when at american.

Makes zero sense??

Cite your source please.

I have a really hard time believing that labor prices; which historically are one of the cheapest expenses of an airline operation, are making 76 seat flying near unprofitable.

Basing the cost of flying on a legacy which is the same exact jet as 145, the break even on a 50 seat jet is around half the airplane based on the lowest fare available for flights between 1.5 hours. The 145 is not nearly as efficient compared to the 175. I ran these numbers myself out of curiousity.

I feel like management has been stuffing the “labor prices will bankrupt this airline” thing down pilots and flight attendants throats so long that it’s starting to take hold.

Current spot price for airline fuel is about $2.14 a gallon. An e-175 average burn on a 500 mile segment is maybe 560 gallons. That places fuel costs at roughly $1200/HR. If the captain is getting $100/hr and the FO is getting $50 an hour, their combined salaries are only about 12% of the fuel cost. It's an expense - certainly - but it's little more than a nuisance compared to fuel prices.