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.
Embraer and Boeing both celebrated the news.
“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.
“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.”
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.”
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.