Boeing’s new partnership venture with Embraer, Boeing Brasil – Commercial, is finally starting to come together. The plan, first put forward in February this yearp will see Boeing take majority control of Embraers E-Jet line, putting it in a fighting position with Airbus’ own Bombardier partnership.
What are the details?
The small jet market has long dominated by a rivalry between Bombardier and Embraer. However, it was always outside the purview of aviation giants Boeing and Airbus. Whilst this market is incredibly lucrative (and is one of the fastest-growing in the world), the duopoly only ever focused on aircraft down to 150 seats (With the smallest Boeing 737 and the Airbus A318 respectively).
Airbus saw a chance to enter the market with very little investment by acquiring Bombardier’s new CSeries. Bombardier had been stonewalled from selling the CSeries in the United States due to anti-competitive practices. Boeing claimed that they were ‘dumping’ the product to Delta, essentially selling them below cost to get a major carrier customer. It was only thanks to Airbus’ involvement and offer to finish the aircraft in their Alabama plant (and hence be an ‘American built’ aircraft) that Bombardier was able to save their aircraft line.
Thus Airbus delivered a decisive blow to Boeing last year when they acquired 51% of Bombardier’s CSeries, essentially taking control of the small regional jet market.
Boeing and Embraer
As now there were only technically three plane builders left (Boeing, Airbus, and Embraer), Boeing followed the age-old mantra of ‘the enemy of my enemy is my friend’ and approached Embraer with a partnership offer. Whilst Embraer already sells its aircraft relatively easily, with improved access to the Boeing sales networks, it could launch its new E-Jet series sky high.
With ink to paper, the new partnership between Embraer and Boeing was formed. Boeing would take 80% of the commercial aircraft division (Embraer’s Brasilian military contacts would decidedly stay in-house) and be allowed to sell the E-Jet series as part of its line up. This new strategic venture would be called Boeing Brasil – Commercial.
“Boeing and Embraer continue to work closely together to establish their strategic partnership, positioning both companies to deliver greater value to airline customers and the flying public, and to accelerate growth in global aerospace markets.” – Boeing Statement
What is the latest with their partnership?
So far the venture has had approved in Brasil and just recently, the United States’ U.S. Federal Trade Commission gave the green light after a detailed review. The European Union is still weighing up the deal but has moved its application forward to Phase II assessment, which is a great sign.
Boeing has not been able to confirm an exact date when the strategic venture will officially begin operation, but they are confident that it will be sometime in 2020.
In the meantime, Boeing and Embraer are working on a smaller partnership to launch the multi-mission medium airlift KC-390, successfully selling one to the Brazilian Air Force and another to the Portuguese government.
“The comprehensive Boeing-Embraer strategic partnership, embodied through these two joint ventures, will position the companies to compete in the global marketplace, to deliver greater value to customers, and to boost the Brazilian aerospace industry as a whole.” – Boeing press statement.
What do you think of this news? Do you think this strategic partnership is a good idea? Let us know in the comments.