By Gabriel Araujo
Brazilian manufacturer Embraer (EMBJ3.SA) expects to finalize new contracts for defense aircraft in the Middle East, including intergovernmental deals, following a historic order for C-390 military aircraft by the United Arab Emirates, stated the head of its defense division on Monday.
The company’s defense division director, Bosco da Costa Junior, told Reuters that the contract for up to 20 C-390 military transport aircraft with the United Arab Emirates, the twelfth country to choose this model, positions the Brazilian aerospace manufacturer for more sales with its allies.
“The Middle East is a strategic region for us,” he said, mentioning that Embraer is promoting the C-390 and the Super Tucano light attack aircraft in the region.
Costa Junior highlighted what he termed a “differentiated” contract with the United Arab Emirates for 10 C-390 aircraft and 10 options – the first time this model has been selected by a buyer in the Middle East.
“I don’t think these 10 options were included in the contract just for the sake of having options,” he said. “I believe we will see intergovernmental mechanisms… facilitating the entry of other nations into the C-390 operators’ club,” he added, without naming potential buyers.
Intergovernmental deals have played a significant role in C-390 sales in Europe, with Sweden joining an agreement led by the Netherlands and Portugal obtaining purchase options for orders placed by other European NATO member countries.
Following the agreement with the United Arab Emirates, Embraer’s shares rose by 2.5%, outperforming the Brazilian benchmark index Ibovespa which fell by 0.9%. Analysts at Itau BBA estimated the value of this firm order to be $1 billion.
AGeing Fleets
In the Middle East, Embraer had campaigned to replace Saudi Arabia’s aging fleet of Lockheed Martin’s C-130, but CEO Francisco Gomes Neto told Reuters earlier this year that the prospects of an order from this country had dimmed.
The United Arab Emirates currently operates both the C-130 and the Boeing C-17.
Costa Junior stated that ongoing global conflicts were not directly accelerating sales, but were prompting governments to focus more on operating costs and asset availability, influencing fleet renewal decisions.
Embraer estimates a global demand for 400 to 480 aircraft in the military transport segment over the next 20 years, mainly to replace aging fleets, with around 260 aircraft worldwide approaching or surpassing 45 years of service.
“These aircraft will need to be replaced,” he said, noting that the C-390 was preferred to operate in any region.
