In mid-September, Embraer hosted an event marking the first delivery of its E195-E2, the second variant of its three-member E2 family to be developed.

In mid-September, Embraer hosted an event marking the first delivery of its E195-E2, the second variant of its three-member E2 family to be developed.

That handover may prove to be the last of its kind by the company we all know as Embraer.

The global aerospace merger train is rumbling south to Embraer’s home town of Sao Jose dos Campos – this time led by Boeing.

If all goes to plan – and it may not, since big hurdles remain – a company called Boeing Brasil – Commercial may soon be in charge of the E-Jet programme.

Azul E195-E2


By “early in 2020”, Boeing hopes to purchase 80% of Embraer’s commercial aircraft unit for $4.2 billion.

The move will see another regional aircraft manufacturer gobbled up by a much bigger player, reflective of Airbus’s 2018 majority-ownership purchase of Bombardier’s CSeries, now called the A220.

Some industry analysts view the Boeing-Embraer union not only as sensible, but rich with potential, while warning that cultural differences could pose challenges.

The implications will reverberate through the industry, leaving regional aircraft maker Mitsubishi Aircraft alone outside the spheres of Airbus and Boeing.


During a recent visit to Embraer’s Sao Jose dos Campos site, AirInsight aerospace consultant Addison Schonland sensed uncertainty – even wariness – about the deal among Embraer’s staff.

“People are very nervous… about what is going on,” Schonland says. “There is clearly a very different culture here.”

“Warm and embracing” and “proudly Brazilian” is how he describes Embraer’s culture. “One has to wonder if that’s going to be respected going forward.”

For starters, Boeing, a $101-billion-revenue company last year, dwarfs $5.1 billion Embraer.

Boeing also has a reputation for pressing its way of doing business upon partners – an approach widely known as the “Boeing Way”, says Schonland.

Embraer’s roots reach deep into Brazil’s aerospace history, which took a leap forward in 1946 with the formation of an aerospace commission in Sao Jose dos Campos. That commission formed the Institute of Aeronautical Technology, spurring research and innovation.

Established in the same city in 1969 with government assistance, Embraer achieved wide commercial success with its ERJ regional jet and wider success with E-Jets. It then launched the E-Jet E2 line-up, which includes three new-winged variants powered by Pratt & Whitney geared turbofans.

Embraer delivered the first E190-E2 in 2018 and the first E195-E2 at the September event.

The last of the E2 line-up, the E175-E2, remains in development, with Embraer aiming for a 2021 service entry.

But that variant has proved more difficult to sell than the E175 because its heavier weight exceeds the 86,000lb maximum takeoff weight (MTOW) cap under which most US regional airlines operate. Those caps, specified by “scope” terms in major airlines’ pilot contracts, largely prohibit feeder carriers from operating the E175-E2.

No one can deny the E-Jet programme’s success. Embraer has delivered some 1,530 of the aircraft, of which about 180 are flying for Latin American airlines such as Aeromexico Connect, Argentina’s Austral Lineas Aereas, Azul, Venezuela’s Conviasa and Panama’s Copa Airlines, according to Cirium fleets data.

Embraer has roughly 360 more E-Jets on back order, including about 60 E195-E2s destined for Azul.

Meanwhile, Boeing and Embraer continue working to close the commercial aircraft merger they announced in mid-2018. They are also working to form a joint defence business.

John Slattery, chief executive of Embraer’s commercial division, will be chief executive of the Boeing-led commercial unit, to be called Boeing Brasil – Commercial.


The tie-up seemed to be progressing as planned until September when the companies announced a European regulatory review had delayed the planned close of the commercial deal until early 2020. Previously, they expected to close by end-2019.

The European Commission has subjected the merger to a “Phase II” review – a detailed competitive examination that could take 90 days or more. The review comes amid a broader US-EU trade war that has the US on track to place $7.5 billion-worth of tariffs on European imports as compensation for subsidies received by Airbus.

Boeing and Embraer decline to discuss their pending deal beyond previous public comments.

Embraer’s executives have said Boeing’s heft and support will bolster the E-Jet programme, helping to close more sales and improve production.

Boeing views Embraer’s commercial division as filling a gap at the smaller end of its product line-up, giving it a portfolio of aircraft spanning 70 to 450 seats.

Boeing also says the deal will help it secure a third major aircraft design and production site, adding to hubs in Charleston, South Carolina and the Puget Sound region near Seattle.

Aerospace industry experts have speculated that Boeing’s primary target may be Embraer’s well-respected engineering unit, which could help Boeing better digest its full plate of development projects.

Those include the delayed 777X programme, the still-uncommitted New Mid-market Airplane (NMA) programme and possibly development of a 737 replacement. Boeing also has the 737 Max grounding at forefront.

“They need more talent to throw at projects,” Schonland says of Boeing. “The Brazilians have an unbelievable track record.”

Boeing and Embraer need each other, says Richard Aboulafia, vice-president at consultancy Teal Group.

That is partly because the E190-E2 and E195-E2 compete with the A220, which is now backed by Airbus and free of Bombardier’s limitations.

“Airbus can be much more aggressive about cost cutting than Bombardier could be, and Embraer needs to match these lower prices,” Aboulafia says.

Embraer also gives Boeing greater presence in the smaller aircraft segment – important considering Boeing’s limited success selling its smallest commercial product, the roughly 140-seat 737 Max 7, he says.

Boeing will also gain Embraer’s commercial aftermarket business, which aligns with Boeing’s ambition to expand that work, Aboulafia notes.

The US airframer in 2017 rolled services into the newly formed Boeing Global Services business, and chief executive Dennis Muilenburg aimed for $50 billion in annual service revenue in 10 years.

Boeing has since completed several services-related acquisitions, closing 2018 with $17 billion in services revenue, up 17% year on year.


A Boeing-Embraer marriage might put the E-Jet programme on more level pegging with the A220, but it could leave a third competitor, Mitsubishi, at a disadvantage, Aboulafia notes.

“The biggest impact by far [is] to Mitsubishi, which hoped for co-operation for Boeing and now finds itself competing with Boeing,” he says.

Boeing and Mitsubishi have been partners for several years. In 2011, Boeing agreed to support what was then called the MRJ programme, providing technical publication assistance and support work related to online technology, spare parts and field services, the companies have said. Mitsubishi’s parent, Mitsubishi Heavy Industries (MHI), also supplies Boeing with 787 components

Mitsubishi Aircraft declines to say how the still-pending Boeing-Embraer marriage will affect its agreements with Boeing.

But, as if signalling a realignment, Mitsubishi this year agreed to purchase Bombardier’s CRJ programme for $550 million, a deal analysts see primarily as a move to acquire the CRJ’s services network. The deal will close in the first half of 2020 and CRJ production will end shortly after, the companies have said.

Additionally, Mitsubishi recently announced the opening of an office in the CRJ’s home town of Montreal.

Regardless, the Japanese airframer insists it is well positioned to compete against a Boeing-backed E-Jet. And it says airlines eagerly want a choice besides the Brazilian jet.

Mitsubishi overhauled its badly delayed regional aircraft line-up this year and renamed the programme SpaceJet. The 90-seat MRJ90 became the SpaceJet M90, which the company now expects to begin delivering in 2020.

Mitsubishi also cancelled its MRJ70, which, with 69 seats in two classes, was viewed by analysts as disadvantaged against competing 76-seat aircraft like E175s.

In the MRJ70’s place, Mitsubishi is now developing the SpaceJet M100, a slightly larger aircraft designed to carry 76 passengers in two classes. It expects to deliver that aircraft first in 2024. Both the M90 and M100 will have next-generation PW1200G turbofans.

Mitsubishi says that, because those aircraft have less than 100 seats, they will not compete directly against A220s, E195-E2s or E190-E2s, which are even closer in size.

They will, however, compete against E175s and E175-E2s, which, as Bombardier wraps up CRJ production, are realistically the only other viable 76-seaters.

But the M100’s MTOW will not exceed 86,000lb, meaning US regional airlines will be able to operate it under the existing weight cap, Mitsubishi notes.

It is worth remembering that the E175-E2 exceeds the cap. That means, barring a lifting of the limit, the new-technology M100 essentially competes in the USA – the biggest regional jet market – against the older-generation E175, Mitsubishi notes.

“The M100 will be the only aircraft that can operate within the existing scope,” the company says.

“With Bombardier leaving the regional market, there is definitely room for competition,” it adds. “The airlines need choice, so they are welcoming the fact that we are coming in.”

Mitsubishi also counters the notion that it lacks a strong corporate backing, noting that its parent is $38 billion-revenue MHI.

“MHI is one of largest manufacturers in the world and a tier-one supplier to Boeing,” it says.

“It’s not like we are… a small start-up company,” Mitsubishi adds. “We have the full backing of MHI and access to their global resources.”