Into Botelho's shoes: Fred Curado prepares to take over as Embraer CEO

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and Aimée Turner

From embattled, niche manufacturer of small turboprops and military trainers to the world's third biggest airframer, Embraer has come a long way since Maurício Botelho took the helm as president and chief executive of the then newly-privatised Brazilian company in 1995.

As he prepares to hand over to his successor, Embraer veteran Fred Curado, Botelho has shaped a diversified group with the biggest and most modern regional aircraft line-up, a burgeoning defence arm and a business aircraft division that has gone from a regional jet offshoot to a highly-innovative business in its own right, with models ranging from very light jets to corporate airliners.

Curado - until now the executive vice-president in charge of the regional airliner business - was hotly tipped to succeed Botelho, who finally retires in April. His challenge will be to build on Botelho's legacy, shoring up the E-Jet family of 70- to 120-seat regional aircraft as the market for its original ERJ 37- to 50-seat aircraft dwindles, bringing three new business jet types to market and, building, for the first time, a credible global defence business.

When Botelho arrived he had an impressive track record as a prominent Brazilian industrialist. He joined a company that had been building aircraft since 1970, but was still seen as a third world minnow with unrealistic ambitions by its North American and European rivals (several of which, of course, have since left the market). It had been dubbed Jungle Jets since its announcement that it planned to build a jet version of the Brasilia turboprop in the late 1980s.

It is unlikely that Curado's accession will see a dramatic change of strategy at Embraer. Botelho, who has an academic background in both mechanical engineering and business administration, is certainly a big personality, very much "Mr Embraer" and seen as a visionary and risk-taker.

Curado, who has spent 12 years with Embraer working in production, quality, planning, organisational and commercial divisions, will be "more formal", believes one São Paulo-based analyst. That analyst believes Curado will be keen to follow a steady course. "I don't think his appointment will affect the strategy that much - it will be a continuation of what we have seen before. But the fact that Embraer has chosen someone who has been the leader of the commercial jet segment is a clear indication that it will remain the focus of the company as it has been for a few years." He adds: "The focus has to be on commercial jets - there is much more potential there."

However, the new Phenom pairing of very light and light jets will be a key plank of its product offering, with plans to build up to 150 of the new models a year by 2009. It also plans to ramp up production of the ERJ-135-based Legacy 600 business jet to 30 a year by the end of the decade. The E-190-based large cabin Lineage 1000 will complete the business aircraft range when it enters service in 2008.

Defence, currently 11% of Embraer's sales, is another priority for Curado. As Botelho said last week at a ceremony to mark the handover of the first E-195 to UK airline FlyBe: "Our aim is to increase the defence and executive [business aviation] markets to diversify our revenue streams."

Botelho, who will remain as Embraer chairman until 2009, is also confident that the E-Jet range, which has knocked rival Bombardier into second place in terms of backlog, will hold its own in the regional jet market, which represents 70% of its business. He sees the biggest threats to its prospects coming not from revamped narrowbodies from Airbus and Boeing, but from new players from emerging economies. "Challenges are part of life," he says. "I have never believed we would be alone in one market forever. I think Airbus and Boeing will fight between themselves to dominate in their traditional markets. The much greater challenge for Embraer is coming from Russia and China."

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