Brazil's Embraer wins US$2.4b deal for 50 regional jets

Brazilian aerospace giant Embraer on Monday announced that it had won an order worth US$2.4 billion for 50 regional jets from US airlines-owner Trans States Holdings.

"Embraer... has received an order for 50 E175-E2 jets from Trans States Holdings, parent company of Trans States Airlines, Compass Airlines and GoJet Airlines," said a statement issued during the Farnborough airshow near London.

"The order, which is valued at approximately US$2.4 billion (1.76 billion euros) at list prices, is subject to certain conditions," it added.

The agreement includes options for an additional 50 aircraft. Deliveries are scheduled to begin in June 2020.

"The improved performance and cost savings technologies the E2 will bring to the marketplace will enhance Trans States Holdings' ability to provide industry-leading solutions in fuel burn, maintenance costs, environmental impact and performance through cutting-edge technological advancements to our major airline customers," said Richard A. Leach, president of Trans States Holdings.

Embraer, the world's third largest commercial planemaker, launched its more fuel-efficient E2 series last year.

"The E175-E2 is proving to be the preferred aircraft for North American carriers as they confirm their future fleet requirements for the next decade," Paulo Cesar Silva, chief executive of Embraer's commercial aviation division, said Monday.

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Boeing, Embraer to open joint biofuel research centre

US aerospace giant Boeing and Brazil's Embraer said on Monday they will open a joint research centre in Brazil to develop a sustainable biofuel for the aviation industry.

The research "will focus on technologies that address gaps in a supply chain for sustainable aviation biofuel in Brazil, such as feedstock production and processing technologies," the companies said in a statement.

When produced in sustainable ways, aviation biofuels, made from renewable resources such as plants, significantly reduce carbon emissions.

The two companies estimated aviation biofuel emits 50 to 80 percent less carbon through its lifecycle than petroleum jet fuel.

Globally, more than 1,500 passenger flights using biofuel have been conducted since the fuel was approved for use in 2011, they noted.

The research centre will be located in Sao Jose dos Campos, an industrial and research hub in southeastern Brazil where Embraer is based.

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Brazil's Embraer meets jet delivery targets for 2013

Brazil's top aircraft manufacturer Embraer said on Wednesday said it met its aircraft delivery targets for 2013 following strong sales in the fourth quarter.

A company statement said a total of 209 aircraft were delivered, including 90 commercial jets and 119 light and large executive jets.

The company had set delivery targets of between 90 and 95 commercial aircraft, 80 and to 90 light executive jets and 25 to 30 larger executive jets.

Embraer, based in Sao Jose dos Campos near Sao Paulo, said its order backlog stood at US$18.2 billion the end of 2013.

The strong performance in the fourth quarter included a huge order for 60 E175 jets from American Airlines in a contract valued at US$2.5 billion.

Embraer last month said the deal includes an option for American Airlines to buy another 90 E175s, which could bring the total order to 150 aircraft.

Embraer is the world's third largest commercial aircraft manufacturer behind Boeing and Airbus.

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Brazil airlines want 1,500 more flights for World Cup

Brazilian airlines, including heavyweights TAM and Gol, have asked the country's aviation authorities to allow some 1,500 additional flights to meet demand during the World Cup, officials said on Wednesday.

A statement from the National Civil Aviation Agency (ANAC) said the airlines' requests were being considered and "will be approved based on the capacity of each airport" in terms of runways and parking space.

ANAC said it would publish its final decision on January 15.

Brazil hopes to welcome 600,000 foreign visitors during the World Cup, which is also expected to draw three million Brazilians.

There is no real alternative to air travel in this continent-sized country of more than 200 million people, where airports often are congested and in urgent need of an upgrade.

Authorities have launched an airport modernization drive, but it will be completed only in 2018.

Brazil's poor airport infrastructure limits the prospects for increasing the number of flights during the tournament, which will be held in a dozen host cities across the nation from June 12 to July 13.

ANAC will have to schedule part of the new domestic routes at alternative hours, taking into account the match schedules.

"We will try to accommodate everybody based on the structure of the 25 airports concerned," the O Globo daily quoted Moreira Franco, head of the Civil Aviation Secretariat, as saying.

The top five routes preferred by the airlines are Brasilia-Sao Paulo (Guarulhos airport); Rio de Janeiro-Buenos Aires, Rio de Janeiro-Campinas (in Sao Paulo state), Fortaleza-Sao Paulo and Salvador-Sao Paulo.

The airlines are pushing for a 48 per cent increase in the number of flights in Cuiaba, capital of the central-western state of Mato Grosso.

They also want 36.5 per cent more flights at Sao Paulo's Guarulhos airport, 27.5 per cent more in Natal, 17.8 per cent in Fortaleza, 14 per cent more in Salvador and 13 per cent more in Recide and Rio, according to ANAC.

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Brazil's Embraer profit slips 19%

Brazil's top planemaker Embraer reported a 19 per cent fall in third-quarter profit due to deliveries of less profitable jets on Thursday, as its workers went on strike.

Net income reached US$52.9 million in the third quarter ended September 30, down from US$65 million during the same period last year.

During the second quarter, the company reported a loss of US$5.3 million due to the depreciating real.

Embraer said it delivered a total of 19 commercial and 25 executive aircraft in the third quarter, for a cumulative total of 58 commercial and 66 executive jets for the first nine months of 2013.

During the same period last year, a total of 83 commercial and 46 executive aircraft were delivered.

Third-quarter revenue totaled US$1.28 billion, down 8.1 per cent from a year earlier.

"Our third-quarter numbers were a little below what we expected because of some delayed deliveries," Embraer's chief financial officer Jose Antonio Filippo told reporters in a conference call.

In a statement, the aircraft maker also blamed the decline on "lower commercial aviation deliveries in 3Q13 compared to last year, combined with a mix shift toward the smaller E-Jets E170 and E175 aircraft models."

"The lower revenue and product mix shift in the quarter were the principal drivers of a decline in gross margin to 19.2 per cent in 3Q13 compared to the 25.2 per cent reported in 3Q12," it added.

Meanwhile, thousands of Embraer workers launched a 24-hour strike over pay at the company's headquarters in Sao Jose dos Campos near Sao Paulo, the Metalworkers Union said in a statement.

It was the third work stoppage at Embraer this month alone to press demands for a 10 per cent pay hike.

The union has rejected an Embraer offer of a 6.07 per cent pay increase and is also demanding a reduction of the work week to 40 hours from the current 43 hours.

It said it had no choice but to go on strike in view of the management's intransigence.

But Filippo insisted that the strike had "no impact on productivity."

Embraer is the world's third-largest commercial aircraft manufacturer, behind American Boeing and Europe's Airbus.

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