Arab Skies Friendlier to Brazil’s Embraer

    Gulf Air, an airline belonging to the governments of Bahrain, Oman and Abu Dhabi, is interested in entering the regional aviation market and Brazilian aircraft maker Embraer is “considered” a possible supplier of airships for this sector.

    This information was provided by the Embraer executive vice president for the civil aviation market, Frederico Fleury Curado.


    “Gulf Air is interested in regional aviation and Embraer is considered a possible supplier,” stated Curado on Friday, December 3, during a luncheon offered by the company to journalists.


    Embraer produces two lines of regional jets. The ERJ 145 is composed of three aircraft with a capacity for between 37 and 50 passengers. The ERJ 145, for 50 passengers, costs around US$ 20 million.


    The other family is the new Embraer 170/190, with four models that seat between 70 and 118 people. The prices of the jets in this line vary from US$ 25 million, for the Embraer 170, and US$ 32 million, for the Embraer 195.


    Last year, the president of Gulf Air, James Hogan, had already announced the company interest in buying regional jets, for between 70 and 100 passengers, from Embraer or from the company’s main competitor, Canadian Bombardier, to operate the company flights in the Middle East.


    Today the company, based in Bahrain, has 35 larger aircraft, all made by North American Boeing and by European Airbus. The company, however, has the intention of doubling its fleet up to 2009, as part of the company’s restructuring plan.


    Established in 1950, Gulf Air has recently suffered financial problems. In 2001 the company had losses of US$ 138 million, which fell to US$ 108 million in 2002 and to US$ 52.8 million in 2003.


    After putting into practice a recovery plan, baptized “Falcon Project” (the bird is the company symbol), the company had revenues of US$ 1.02 billion last year, against 909.8 million in 2002.


    The company hopes to end 2004 in the black, according to Hogan. The company transported a record number of passengers this year, and debt has reached the lowest level since 1989.


    Egypt


    Apart from Gulf Air, there are other opportunities for Embraer in other Arab countries.


    “Egypt might start buying Embraer aircraft,” said the Brazilian ambassador in Cairo, Elim Dutra.


    Company president Maurí­cio Botelho, however, did not comment on the subject. “I do not comment on projects in development, I only discuss closed contracts,” he said.


    The Brazilian company has already done business with Egypt. In the 1980’s a total of 134 Tucano aircraft, a turboprop for military training and light attack, were sold to the Arab country. Some of the aircraft were, incidentally, assembled in an Egyptian factory.


    Embraer considers the market for 70- to 110-seater aircraft, for which the 170/190 family was developed, practically unexplored.


    The first deliveries of the 170 took place at the beginning of this year and, up to the end of 2004, the company believes that 36 should be flying around the world.


    The company states that it already has 300 firm orders for aircraft in this family, over 400 options, and they believe that they may have the same success as they had in the ERJ 145 line, of which 774 aircraft have already been delivered since it was released in 1995, and there are over 148 firm orders in the company order backlog.


    The company forecasts delivery of a total of 145 commercial aircraft in 2004, 145 in 2005 and the same number in 2006.


    To Maurí­cio Botelho, despite delivery of the same number of aircraft, company profitability should rise in the period, as the deliveries should include larger volumes of greater added value aircraft, represented by the 170/190 family, than of the older aircraft, like the 145.


    In this market, the company is awaiting the result of a tender by Russian airline Aeroflot for the purchase of 50 aircraft for between 70 and 100 passengers, in which the company is competing with Bombardier, Boeing and Airbus, as well as Russian companies.


    US$ 120 Billion Market


    Still in 2005, Embraer is going to dedicate itself more strongly to the corporate aviation market that, according to Curado, should have a worldwide turnover of around US$ 120 billion in the next 10 years.


    According to him, this sector includes aircraft costing from US$ 2 million to US$ 50 million.


    Embraer already produces the Legacy executive jet, which costs around US$ 22 million, but they may develop new products, or expand the options in the Legacy platform (there are currently 2), in case they decide to bet more heavily on that market.


    Currently, according to Curado, five companies operate strongly in the sector: Raytheon, Bombardier, Cessna, Dassault and Gulfstream.


    ANBA ”“ Brazil-Arab News Agency

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