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Aviation History
2004
2004-09 - 0163.PDF
Diversification REAK IG THROUGH Two key competitions could see Brazil's Embraer finally achieving its long-pursued goal of breaking into the defence market in a major way STEPHEN TRIMBLE / SAO JOSE DOS CAMPOS After several false starts, Embraer's emerging defence portfolio is finally on the verge of major breakthroughs in two key competitions. Meanwhile, the company has been picking up momentum across a range of new defence-related products. The Brazilian air force and a joint pro gramme by the US Army and US Navy are both nearing major aircraft decisions. Embraer has teamed with Dassault Aviation to offer the modified Mirage 2000BR for the long-awaited Brazilian FX-BR fighter pro gramme, which has also attracted bids with the Lockheed Martin F-16, Saab/BAE Systems JAS39 Gripen and the Sukhoi Su-35. After a series of delays, a final deci sion is expected in late March or early April, according to local reports. The Mirage is widely viewed to be the leading candidate, although some reports indicate that the air force's preference is for the Sukhoi, followed by the Gripen. The FX-BR is to replace age ing fleets of Alenia/Aermacchi/Embraer AMX, Northrop F-5 and Mirage III aircraft in the air force inventory. Foothold Meanwhile, US officials are in final source selection for the Aerial Common Sensor (ACS) programme, which may include up to 150 new aircraft to replace the US Army's intelligence-gathering RC-7s and RC-12s and the navy's EP-3s. Lockheed Martin has selected the Embraer ERJ-145 as the airborne platform, and is competing against a Northrop Grumman proposal based on the Gulfstream G450 business jet. A victory for Embraer could establish a foothold in the North American defence market, including a new final-assembly facility in Jacksonville, Florida. Embraer's participation in Lockheed Martin's bid, however, is limited to delivering a green platform, leaving it shut out of the poten tial benefits of the programme's technol ogy development requirements. Embraer hopes to adapt more of its com mercial products for defence applications. In addition to a host of ERJ-145-based surveil lance roles, the ERJ-135 is being offered as a VIP transport for government dignitaries. Embraer has pursued the defence market for several years, with mixed results. It started forging industrial and government partnerships in the mid-1990s to begin entering the market. The move towards defence was already advanced when the commercial market crisis of late 2001 und erscored Embraer's drive to diversify its rev enue base, says Anastacio Katsonos, director of defence market strategy. In 1999, Embraer chief executive Mauricio Botelho said that the defence market should account for 30% of all air craft sales by this year. Company officials later revised the five-year goal downward to 25%. In 2003, defence sales accounted for only 10% of the company's revenues. In February, Katsonos further trimmed Embraer's new five-year objective for the defence market to 20%. This downward shift is partly a reflection of the runaway growth of Embraer's regional jet business, www.fliqhtinternational.com FLIGHT INTERNATIONAL 23-29 MARCH 2004 41
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