UPDATE: Brazil's Embraer Talks Engines For New Airliner
September 02 2009 - 11:08AM
Dow Jones News
Brazilian aircraft manufacturer Embraer (ERJ) is in talks with
General Electric (GE), Rolls-Royce (RR.LN) and Pratt & Whitney
over next generation engines for a new airliner, said a top company
executive Wednesday.
"We are looking at a series of commercial options, including
larger commercial jets and turboprops. No decision has been taken
but we are deep in discussion," Mauro Kern, Embraer's vice
president for the airline market told Dow Jones Newswires.
He said that among the options being discussed is a commercial
jet that is slightly larger than the existing E-jet family, which
would put it in direct competition with the Bombardier (BBD.B.T)
CSeries.
"However, it is difficult to make a decision on this without
knowing the plans of the major players. We need to know what Boeing
Co. (BA) and Airbus are planning for this segment," said Kern.
Embraer's largest commercial jet is the E195, which holds up to
120 passengers. However, arch rival Bombardier has launched the
CSeries, which will carry 110-130 passengers. These planes are due
to enter service in 2013.
At the time it launched the E-195, Embraer dismissed the idea of
building larger planes to avoid stepping on the toes of Boeing and
Airbus.
But next generation engine technology offers greater
efficiencies and opens up other possibilities, said Kern.
He said that Embraer, also known as Empresa Brasileira de
Aeronautica SA, would make a decision on next generation planes in
the next 18 to 24 months and any new plane would not be rolled out
until the second half of the next decade.
The company was looking at using a completely new design for the
plane, known as a clean-sheet design, although nothing had been
decided, he said.
Embraer is the world's fourth largest aircraft maker, having
made its name producing regional commercial jets but it has
recently branched out into the executive jet market with some
success.
Kern said Embraer continues to suffer amid low options take up
and delivery postponement requests from clients as the commercial
aviation market remains in the doldrums. He added that he doesn't
see the commercial jet market recovering until late 2010 at the
earliest.
Moreover, he wouldn't discount further job cuts, if the crisis
continues.
In March, Embraer laid off 20% of its workforce because of the
bleak outlook for the aviation industry amid the global
slowdown.
Embraer shares were 0.3% lower at 9.97 reals ($5.22) on the
Brazilian Stock Exchange, while the benchmark Ibovespa index was
05% lower.
-By Alastair Stewart; Dow Jones Newswires; 5511 2847-4520;
alastair.stewart@dowjones.com