Boeing’s Purchase Of Embraer Approved By Brazil – What Does This Mean?

Brazil has approved the Embraer and Boeing partnership, allowing Boeing to launch Embraer small jets as part of their own product line and take on Airbus & their small A220 head-on.

Embraer Sale
Boeing os cleared to purchase an 80% share in Embraer’s commercial arm. Photo: Embraer

What are the details?

Brazil has given the green light for the final approval of Boeing’s take over of Embraer, starting a new era of small Boeing jets.

Boeing has been in discussion with a partnership with the Brazilian planemaker, to help build and distribute their E-Jet family. In detail, Boeing will buy 80% of the Embraer commercial arm as well as a joint venture to help market Embraer’s military aircraft to the world.

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Embraer and Boeing both celebrated the news. 

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“This latest clearance is yet another endorsement of our partnership, which will bring greater competition to the regional jet marketplace, better value for our customers and opportunities for our employees,” said Marc Allen, Boeing’s president of Embraer Partnership & Group Operations.

Getty 737 MAX
Boeing will also bring plenty of expertise in building aircraft to Brazil. Photo: Getty

Brazil’s approval of the deal is a clear demonstration of the pro-competitive nature of our partnership,” said Francisco Gomes Neto, president, and CEO of Embraer. “It will not only benefit our customers but also allow the growth of Embraer and the Brazilian aeronautical industry as a whole.”

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So far the deal has been approved for all markets apart from Europe. Naturally, as the home of Airbus, Europe has been a bit slower to approve the deal. Nonetheless, if the takeover deal was approved everywhere else, likely it is only a short matter of time for Europe to follow suit.

“We have been productively engaged with the Commission to demonstrate the pro-competitive nature of our planned partnership, and we look forward to a positive outcome,” Boeing’s Allen said. “Given the positive endorsement we’ve seen from customers across Europe and the unconditional clearance we’ve received from every other regulator who has considered the transaction, we look forward to securing final approval for the transaction as soon as possible.”

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European regulators have yet to approve the Boeing-Embraer deal. Photo: Embraer

What does this mean for passengers?

The Boeing-Embraer partnership means an exciting new age of aircraft for passengers.

Whilst the E-Jet family is well known throughout the world and heavily used in the US airlines regional fleets, the new version of the aircraft (E-Jet E2) has not been incredibly popular with airlines (only 189 have been sold so far). With Boeing backing the aircraft, the airframe might become a lot more popular.

Additionally, Boeing is looking at a new turboprop aircraft concept with the Brazilian planemaker. Embraer has been looking at launching a new propeller aircraft but has been hesitant due to the high costs involved with the design. Now that Boeing is onboard, likely the funding will be available.

“It sits in our target market, which we have always been clear is below 150 seats, and will have natural adjacency to the E2 offering” – Embraer Commercial Aviation’s Chief Executive John Slattery spoke with Reuters.

Some experts have suggested that Boeing might shift some production of their mainline fleets (Boeing 737 or perhaps Boeing 787) to save on labor costs, however, as Boeing is so involved with the US government (who likes to keep production within the United States) this is likely not to happen.

What do you think about this news? Let us know in the comments.

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Adam

Embraer E175 MAX lol imagine

David C.

Does it mean that Boeing can run another company into trouble in the search for “Efficiencies”?

JFP

Boeing would be wise to shift mainline commercial production to Brazil. Not just for cost reduction. The writer of the article is assuming that the ‘U.S. Government likes to keep production in the United States’, while the FAA has done everything possible to harass and intimidate Boeing for the sake of being PC, having now succeeded with the cessation (end?) of 737Max production. With the loss to date of 3,000 U.S. production jobs. Boeing should take its production -and those jobs- to friendlier territory. As the probable end of 747 production in sight (with the end of fuselage production by… Read more »

TonytTDK

JFP, Are you actually such an idiot to believe what you’ve written, or are you just deliberately trolling this site as a one-eyed, Boeing fanboy.? What the US states of Washington, Kansas & South Carolina think is completely irrellevant.! The FAA screwed-up Royally when they ceretified the MAX as fit to fly the 1st time around.! The FACT that the aircraft has been grounded BY THE FAA for almost a year, is testament to how badly the FAA screwed-up, because it’s taken them all that time to recheck all the work they previously did AND check-up on all the work… Read more »

Frank

Unless Boeing is able to get the pilots unions in the US to change their scope clauses, the E2 jets are not going to be very popular. The A220 is quietly sewing up the long and thin niche in the 100-150 pax range (which the E2’s really don’t compete in) and the smallest E2 which just had it’s first flight, has zero orders due to scope clause limitations.

Not sure where they go from here.

Roger

What does it mean? It means we will see a few unfortunate Embraer plane crashes in the future due to Boeing’s “efficiency improvements”.

Armand2REP

Until the EU approves then it doesn’t mean anything. If this is found to violate anti-trust the whole deal will be scrapped. Maybe Trump should rethink tariffs on Airbus…

TonytTDK

I can’t see why it should violate EU trade rules.?
Both countries are outside of the EU. Perhaps manufacturing additional aircraft in Brasil would violate any existing EU-Brasil/Mercosur agreements, but I would have thought that the EU could renegotiate that part of their agreement.
I can’t see either Boeing or the Brasillian state being in a position to subsidise any trade-deal between Boeing & Embarear, so I can’t see unfair subsidies being an issue either.?

High Mile Club

I don’t see why they need EU permission. Airbus partnered with Bombardier (who might be pulling out of the deal as it doesn’t help their situation), so I’d say it’s about fair if Boeing and Embraer work something out.

TonytTDK

Bombardier came to Airbus as they were in severe financial difficulties & that deal Only includes ONE aircraft type.
Unless the Actual deal is for Embarear to take-over Boeing, because of Boeings severe financial difficulties, then the 2 situations are actually Very different.?
That said, I can’t see why the EU would find a problem with the Boeing-Embarear tie-up. I can see how other nations with their own ‘fledgeling’ airliner manufacturing businesses might cry ‘foul’ though.?

Noah Bowie

It’s amazing Boeing can afford this as their financial situation is so incredible that they had to go crawling to the US government for a small loan of at least $10 billion

John

E2 <<<<<< A220.

Boeing has bought a turkey.

TonytTDK

It’s a change from making one themselves, though.?

Guilherme Lobato

I am sad to see a national pride like Embraer being sold to a foreign company. I hope this works, I like E2 a lot.

Klaus Schumacher

They should bring the Max back on track and pay the loans of 12 billion and the 60 million redundancy of the Ex CEO back. It will be a long and a hard time getting the image repaired and the customer trust back.

TonytTDK

Boeing is exceptionally good at distraction techniques. All through the grounding of the MAX, Denis Mulliner was appearing on TV & in media interviews talking about what Boeing was ‘just about to do’…….; An all new B737 replacement, An all new MoM/B797/NMA to fill the B757 gap it’s had for over 10 years. A new Spaceplane…….. etc, etc, etc…… Now, the company which has been forced to actually post a trading loss, in spite of how ‘creative’ it’s corporate accountants are & is still $20 Billion in debt on the B787 programme, probably a similar amount on the MAX &… Read more »

Andy

Every dog has its day – maybe it’s Embraer’s time to shine. Perhaps in 20 years time Boeing will be rebranded Embraer USA?