In less than nine years Embraer has been transformed from a money losing state run company into the fourth largest civil aerospace manufacturer in the world with a listing on the New York stock exchange. Much of the credit goes to Mauricio Botelho, who took the helm as president and chief executive officer in 1995. Botelho, a mechanical engineer by training, shares his outlook for the company's future with Flight International's Paul Lewis.


Q: We're reading financial analyst reports suggesting that the regional jet revolution is over. Do you agree, or do you see the market evolving?

A: I would agree that in Europe and USA it is unlikely we'll see new jumbo orders as in the past. There will be orders for 50-seaters and smaller jets but not of the same size and magnitude. I see the market changing. As a consequence of airline difficulties today, being forced to rationalise fleets and the relaxation in scope clauses, there is definitely a very strong demand for 70 to 110-seats.

Q: When you talk about 70 to 110-seats, do you regard that as the regional market?

A: It is and it is not. Some of the mainline carriers are focused on the 100-seater, while the regional airliners are focused on the 70-seaters. What is interesting is the expansion of the regional airlines and downsizing of the mainline carriers. The question is who will operate the 100-seaters as the requirements are slightly different in terms of service and structure.

Q: Do you see today's 190/195 addressing the needs of the mainline carrier?

A: Yes, it's the perfect suit for this market. It's not a regional jet; it's a big aircraft. Look at it in terms of the comfort it provides, the seat spacing, the height of the cabin, the baggage compartment and performance. This is much more compliant with mainline airline requirements than what is known today as the regional jet. When you see the regional airlines growing their fleets to 70-seats and major carriers coming down to 100-seat aircraft and the level of comfort expected by passengers, this is the perfect aircraft.

Q: Today we see small volume, short haul routes being served by turboprops that one day will have to be replaced. Do you see the need for a new turboprop, or an even lower cost jet to operate in this market?

A: Theoretically yes, but you need to find an economic equilibrium. Twenty years ago no one could see a jet operating with 50 seats being economically viable. Technology developed and today we see thousands of such regional jets. Currently however, it would not be economically feasibility to develop and operate a 20 to 25-seat jet.

Q: Beyond the 170/190 what do you foresee Embraer developing next?

A: Today we see Airbus concentrating on developing a 600-seat aircraft and there is talk of Boeing designing a 250/300-seater. Is there going to be a technological drive that makes the present generation of 200-seat and smaller jets uncompetitive? Is the trend of increasing the number of seats per aircraft going to continue and will Boeing and Airbus continue to concentrate on the large aircraft market? Will this leave room for us at the smaller end of the market? These are all questions that have to be answered. Today I can tell you we have no intent of moving into that camp.

Q: The French aerospace industry collectively owns a 20% stake in Embraer. Do you derive any benefits in the civil sector from this relationship?

A: None. The purpose is very much directed at the defence market. In the beginning we thought about some synergies that could be exploited with ATR, but very soon realised there is nothing for us to do together.

Q: How important is the Brazilian air force F-X programme to Embraer?

A: As an aircraft itself, it is of low value for us. Technologically it is of major value. Our role will be to expand the system and in doing that we'll get technology transfer, including the source codes, aerostructures, aerodynamics data and so on. If the Mirage 2000BR programme is successful, we'll get relevant and sensible technology not available anywhere else.

Technology is not there just because you have the drawings. Technology only has value if you are deeply involved in its practice. Our future is not dependent on this technology, but it will be part of our future. It will be a strong capability that is added to the company.

Q: Do you ever foresee building an indigenous fighter or advanced trainer for the Brazilian air force?

A: I don't see this today, not because of our capabilities, but the investment needed. The Brazilian market by itself would not support an investment of that magnitude. Some Brazilian air force officers would love to have a self-developed and customised fighter, but this is a dream.

We won't have in the defence export market the same capability we have on the commercial side, where we compete for the leadership. We can be successful in niche areas such as the Super Tucano trainer and AL-X military derivative. We also have intelligence surveillance and reconnaissance aircraft.

Q: Looking at the various Brazilian defence programmes today, like ALX, AMX, F-X, P-X, how would rank them in terms of importance to Embraer?

A: Economically, P-X is the most important. Strategically it's F-X. There could be a need for up to 10 P-X aircraft with very complex and sophisticated systems fully integrated by ourselves. AL-X is very important because I think there is a significant market for 300-400 of these aircraft.

Q: How important are business aircraft to Embraer's business?

A: Today the market is compressed by the poor economic situation and corporate scandals. I see it as a market that will come back and I see us occupying an important role.

The Legacy is our entry to this market. It's a very good aircraft in terms of comfort, performance and range, not just a niche product. It was designed as a workhorse so the reliability and maintenance cost are very important factors. The price is 50-60% that of a similar aircraft.

Q: How many Legacy aircraft is Embraer planning to build a year?

A: Conservatively we're looking at about 24 aircraft per year. The 170 programme we designed to be a constant production of 84 aircraft per year or seven per month. For the ERJ-145 family we have reached 160 deliveries. Plans were to get to 200-220. I don't see it achieving this rate anymore. Long term we think we could sustain it at 50 aircraft per year.

Q: Looking ahead 20 years, where do you see Embraer being positioned?

A: I think we'll have exercised a lot of acquisitions in areas that are compatible with our core competencies of aeronautics, system integration and activities focused on defence. I see us very strongly established, eventually with manufacturing facilities throughout the world.

Source: Flight Daily News