Embraer Sells US$705MM Worth of Jets to American Airlines Before Merger

By Lise Alves, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Brazilian aircraft manufacturer, Embraer has signed a deal with U.S.’s American Airlines to manufacture 15 E175 jets for the U.S. airline company at total purchasing value of US$705 million, announced Embraer early Monday morning.

“This new order from American Airlines continues to show the value that airlines place on our best-selling E175 aircraft,” said Charlie Hillis, Vice President, Sales & Marketing, North America, Embraer Commercial Aviation in a press statement released by the company on November 5th.

The latest order, say analysts, comes weeks before the probable announcement of the finalization of the merger between Embraer and U.S.’s Boeing. The announcement is expected to be made within the next few weeks. The 76-seat aircrafts are expected to be delivered in 2020.

In July, after months of discussions and negotiations, Brazil’s Embraer and U.S.’s Boeing announced they had signed a memorandum of understanding to establish a strategic partnership between the companies to accelerate growth in global aerospace markets.

Despite some resistance by sectors of the Brazilian society which sees this merger as the ‘selling off’ of one of Brazil’s largest home-grown and successful companies, the country’s incoming president, Jair Bolsonaro, says he will endorse the agreement.

“The merger of Embraer with Boeing continues without any problems and yes [I will endorse],” said Bolsonaro to reporters at his first press conference as president-elect.

Although the deal will give U.S. aircraft manufacturer eighty percent of the new partnership, and technically the upper hand in the merger, Brazilian officials say that Brazil would still have the ‘golden share’, which gives the government veto power over strategic decisions related to Embraer operations.

“The partnership with Boeing could make Embraer a stronger company prepared to compete in the coming years,” says retired general Ozires Silva and one of Embraer’s founding fathers.

“Boeing recognizes the technical capacity of Embraer’s engineering and manpower and affirms that Brazil will be the center of excellence of the joint venture, guaranteeing production, job creation and exports to Brazil,” concludes Silva.