Embraer

Embraer S.A.
Sociedade Anônima
Traded as BM&F Bovespa: EMBR3
NYSE: ERJ
Industry Aerospace, Defense
Founded 1969
Founder Government of Brazil
Headquarters São José dos Campos, Brazil
Key people
 Frederico Curado (President & CEO)
Arthur Coutinho (Vice president)
Jackson Schneider (Vice president)
José Filippo (Vice president)[1][2]
Products Aircraft, aircraft components, mission systems for air and ground operation
Revenue Increase US$ 5.7 billion (2013)[3]
Increase US$ 329.1 million (2013)
Number of employees
 19,116 (1st sem 2014) [4]
Subsidiaries Neiva
OGMA
Atech
Bradar
Website www.embraer.com

Embraer S.A. (Portuguese pronunciation: [ẽbɾaˈɛɾ]) is a Brazilian aerospace conglomerate that produces commercial, military, executive and agricultural aircraft[5] and provides aeronautical services. It is headquartered in São José dos Campos, São Paulo State.

The company competes internationally with Canadian rival Bombardier for the title of third-largest airplane maker after Airbus and Boeing.[6]

History

Embraer EMB 110 Bandeirante, an early model

Seeking to develop a domestic aircraft industry, the Brazilian government made several investments in this area during the 1940s and '50s.[7] However, it was not until 1969 that Empresa Brasileira de Aeronáutica (Embraer) was created as a government-owned corporation.[8] Its first president, Ozires Silva, was a government appointee, and the company initially produced a turboprop passenger aircraft, the Embraer EMB 110 Bandeirante, project captained by Silva.[9]

Early growth

The Brazilian Government contributed to Embraer's early growth by providing production contracts.[10] The company sold solely to the domestic market until 1975.

While military aircraft made up the majority of Embraer's products during the 1970s, including the Embraer AT-26 Xavante and the Embraer EMB 312 Tucano, by 1985, it had debuted a regional airliner, the Embraer EMB 120 Brasilia.[11] Aimed at the export market, this plane was the first of Embraer's highly successful small airliners.[12]

License-built Pipers

In 1974, the company started to produce Piper Aircraft light planes under license.[13] Piper first put together knock-down kits in their US factory for Embraer to assemble and market in Brazil and Latin America. By 1978, most of the parts and components were being sourced locally.[13] Between 1974 and 2000, nearly 2,500 license-built Pipers were produced by Embraer.[13]

Privatization

Born from a Brazilian government plan and having been state-run from the beginning,[7] Embraer began a privatization process during the government of Itamar Franco.[14] This was a period of privatization of many state-controlled companies in Brazil. Embraer was sold on December 7, 1994,[8][15] which helped it avoid a looming bankruptcy.[7] The company continued to win government contracts.

The Brazilian government retains interest through possession of golden shares, which allow it veto power.[12]

Initial public offerings

In 2000, Embraer made simultaneous initial public offerings on the NYSE and BM&F Bovespa stock exchanges.[12] As of 2008, its NYSE-traded shares were American Depositary Receipts representing 4 BM&F Bovespa shares.[12] As of 2008, ownership was: Bozano Group 11.10%, Previ (a Brazilian pension fund) 16.40%, Sistel 7.40%, Dassault Aviation 2.1%, EADS 2.1%, Thales 2.1%, Safran 1.1%, Government of Brazil 0.3%, the remainder being publicly traded.[12]

Product line expansion: military, regional and executive

Embraer 190

In the mid-1990s, the company pursued a product line focused on small commercial planes over the military aircraft that had previously made up the majority of its manufacturing.[7] It soon expanded to the production of larger regional airliners, with 70–110 seats, and smaller business jets.[12] Today, the company manufactures for both defense and commerce.[12]

Military transport

On April 19, 2007, Embraer announced it was considering the production of a twin-jet military transport, the Embraer KC-390. Work began in May 2009 with funding from the Brazilian Air Force.[16] Correios, the Brazilian postal service, has shown interest in buying this aircraft.[17][18] Using much of the technology developed for the Embraer 190, the C-390 would carry up to 23 tons of cargo[19] and aims to replace Cold War-era cargo aircraft.[20]

While firm orders for this yet-to-be-produced hauler had not yet been made in the fall of 2010,[16] Argentina had asked for six examples and several South American nations also expressed interest.[21][22]

Government subsidy controversy

Brazil and Canada engaged in an international, adjudicated trade dispute over government subsidies to domestic plane-makers in the late 1990s and early 2000s. The World Trade Organization determined that both countries had provided illegal subsidies to what were supposed to be privately owned industries. Brazil ran an illegal subsidy program, Proex, benefiting its national aviation industry from at least 1999–2000, and Canada illegally subsidized its indigenous regional airliner industry, comprising Bombardier Aerospace.

Production bases and facilities

The company's headquarters and a production base are in São José dos Campos, São Paulo, Brazil. It also has production bases in the State of São Paulo at Botucatu, Eugênio de Melo (a district of São José dos Campos) and Gavião Peixoto. It may have other production bases as well. The company has offices in Beijing, Fort Lauderdale, Florida (US), Paris, Singapore, and Washington, DC (US).[23]

Non-Brazilian main facilities

Subsidiaries

Joint ventures

Aircraft products

Commercial

Lufthansa CityLine Embraer 195LR
Air Canada Express Embraer 175

Military

EMB-145 AEW&C of Hellenic Air Force

Corporate

Legacy 600

Agriculture

Utility

Experimental

Future

In October 2010, Embraer suggested plans to develop very-long-range business jets, entering a sector currently dominated by Gulfstream, Bombardier, and Dassault.[27] In October 2013, they unveiled the Lineage 1000E.[28]

In May 2011, Embraer announced that it was considering building a larger airliner than the E-jets, with five-abreast seating,[29] but, eventually, choose to develop the second generation of its E-Jet family, as E-jets E2.[30]

In Feb 2014, India's newest airline, Air Costa, announced an order for 50 E-jets E2 aircraft worth $2.94 billion at list price. The order has an option for another 50 planes.[31]

Licensed-version aircraft

Military

General aviation

Commercial aircraft deliveries

Year 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Number of Deliveries 4 32 60 96 160 161 131 101 148 141 130 169 204 244 246[32] 204[33] 205[34] 209

The numbers include military versions of commercial aircraft.

Total delivered-backlog-options as of June 30, 2007: 862-53-131 145 Family, 256-399-719 170/190 Family

Competition in the Regional jet market

Orders and Deliveries by year
ARJ21CRJ700E-JetMRJ-70Superjet 100An-148year
Deliveries(Orders) (55)503(619)582(877)(65)(122)1(50)2009
Deliveries(Orders) (87)576(649)671(916)(15)(137)5(72)2010
Deliveries(Orders) (189)593(654)770(1018)(15)3(168)(180)2011
Deliveries(Orders) 2012
Deliveries(Orders) (252)636(725)966(1212)(165)23(229) 2013
ARJ21CRJ700E-JetMRJ-70Superjet 100An-148year
World Airliners Regionals 2009[35] World Airliners Regionals 2010[36] World Airliners Regionals 2011[37] World Airliners Regionals 2012[38]
World Airliners Regionals 2013[39]

References

  1. ↑ "Corporate governance". Embraer. Retrieved 21 September 2014.
  2. ↑ "Botelho resigns as chairman of Embraer". Flightglobal. Retrieved 15 January 2012.
  3. ↑ "Global 2000 List". Forbes. Retrieved 2013-03-21. |contribution= ignored (help)
  4. ↑ Highlights, Embraer.
  5. ↑ "Aircraft". BR: Embraer. Retrieved May 12, 2014.
  6. ↑ "Kansas Airplane Maker Beechcraft Sues U.S. Air Force". Forbes. March 21, 2013..
  7. 1 2 3 4 Territorial Reviews, Madrid, ES: OECD, 2007, pp. 156–157, 264
  8. 1 2 "Timeline", Historical Center (official site), BR: Embraer.
  9. ↑ "Ozires Silva" (in Portuguese). Época Negócios. 28 January 2014. Retrieved 24 October 2014.
  10. ↑ "History", Historical Center (official site), BR: Embraer.
  11. ↑ The Embraer EMB120 Brasilia, Air liners.
  12. 1 2 3 4 5 6 7 Monks, Robert AG; Minow, Nell (2008), Corporate Governance, John Wiley & Sons, pp. 356–359
  13. 1 2 3 "EMB 710 Carioca", Aircraft History, BR: Embraer History Center.
  14. ↑ Eckhouse, John (January 12, 1991), "Brazil on Road Peddling State-Owned Enterprises", The San Francisco Chronicle (final ed.) (San Francisco, CA, US), p. B.1.
  15. ↑ "Os efeitos da privatização sobre o desempenho econômico e financeiro das empresas privatizadas" [The effects of privatisation on the economical & financial performance of the privatised companies], Scielo (in Portuguese) (BR).
  16. 1 2 "Portugal interested in Brazilian military cargo plane", Monitoring European (BBC), February 1, 2010.
  17. ↑ "Costa confirma projeto dos Correios com cargueiro C-390", Monitor Mercantil, August 28, 2007, retrieved October 15, 2007.
  18. ↑ "Brazilian postal service may order Embraer C-390 freighters", Flight global, September 4, 2007, retrieved October 15, 2007.
  19. ↑ "Defense Systems". Embraer. Retrieved 2013-03-21.
  20. ↑ Embraer has military transport aircraft under study (PDF), Embraer.
  21. ↑ Argentina to buy 6 military transport jets from Brazil's Embraer, Madrid: EFE News Service, October 30, 2010.
  22. ↑ "Defense Watch", Defense Daily (Potomac) 247 (47), September 7, 2010.
  23. ↑ "Global presence". Embraer. 2012. Retrieved 24 Dec 2013.
  24. ↑ Trautvetter, Chad. "Approval Imminent for Embraer Legacy 450/500 U.S. Plant", AINonline, 26 August 2014. Accessed 4 September 2014.
  25. ↑ Facilities, Embraer, September 11, 2012, Embraer Aircraft Holding, Inc. 276 SW 34th Street Fort Lauderdale, FL 33315 USA […] Embraer Aircraft Holding, Inc. 1700 Pennsylvania Ave. NW Suite 200 USA Washington, DC 20008
  26. ↑ Aviation Week & Space Technology: 60. 14 October 2013. Missing or empty |title= (help)
  27. ↑ "Embraer mulls over new types", Flight global, 2010-10-21.
  28. ↑ "Embraer Executive Jets Introduces the Lineage 1000E". BR: Embraer. Retrieved 17 December 2013.
  29. ↑ "Correction: Embraer eyes possible ‘five-abreast aircraft’". Flight global. 2011-05-06. Retrieved 2011-05-08.
  30. ↑ "Embraer Launches "E2", the Second Generation of E-Jets", Aviation pros.
  31. ↑ "India’s Air Costa places 2.94 bn order for 50 E-Jets E2 Embraer aircraft", The Economic Times (The India Times).
  32. ↑ "Embraer Closes Out 2010 With 246 Jets Delivered". PR Newswire. Traders Huddle. Jan 18, 2011. Retrieved 2013-03-21.
  33. ↑ Embraer delivers 105 commercial & 99 executive jets in 2011 (PDF) (press release), BR: Embraer.
  34. ↑ Embraer Delivers 106 Commercial and 99 Executive Jets In 2012 (PDF) (press release), BR: Embraer.
  35. ↑ "Regionals", World air liners, Flight global, 2009.
  36. ↑ World air liners regional diversity, Flight global, 2010.
  37. ↑ "Regionals", World air liners, Flight global, 2011.
  38. ↑ World air liner census, Fligh global, 2012.
  39. ↑ "World Ariliners" (PDF), In focus (Cloud front).

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