Maurício Botelho is a fan of Paris. Rather than decry the big air shows as frivolous and gaudy circuses, the president and CEO of Embraer sees them as real business opportunities, especially in a global marketplace where international sales and partnership arrangements play an ever-increasing role.

Shows like Paris are places where pending deals reach fruition, Botelho says. Two years ago Embraer made waves here by disclosing a $4.9 billion order for 40 ERJ-145 regional jets by Switzerland's Crossair. Botelho got confirmation of the sale as he was clearing French customs to attend the Le Bourget show.

This year's Embraer emphases include the ERJ 135-derived Legacy business jet (unveiled at Farnborough last year) and the new ERJ 190 regional, for which Embraer has just selected Japan's Kawasaki Heavy Industries as a risk-sharing partner on the wing.

Kawasaki joins a global line-up of Embraer partners that includes General Electric/Honeywell, Hamilton Sundstrand and Parker Hannifin of the U.S., Spain's Gamesa, Belgium's Sonaca, and Latecoere of France. Wind tunnel testing on the new aircraft has been performed at facilities as diverse as the NLR National Aerospace Laboratory in the Netherlands and Russia's TsAGI Central Aerohydrodynamic Institute. A European consortium of Dassault, EADS, Snecma and Thales owns 10% of Embraer, which is teamed with Italy's Alenia on the new AMX-T jet trainer.

"This is a global business," says Botelho. "It's global in terms of the customer base, the industrial partners and the financial institutions."

Embraer, founded in 1969, has grown to be the world's fourth largest aircraft manufacturer with a March 31 order backlog of $23.7 billion consisting of $10.9 billion in firm orders and $12.8 billion in options. Net sales increased nearly 48% from the first quarter of 2000 to the first quarter of 2001. The company is Brazil's biggest exporter, as 98% of its sales are to foreign customers. Embraer has offices in Australia, China, France, Singapore and the U.S. and a total workforce of about 11,000.

Partnerships have allowed Embraer to boost its production rate on its best-established, 30- to 50-passenger ERJ 145 family from seven aircraft per month at the end of 1999 to 17 per month now, says Botelho. For the larger 190, "we expanded the concept of partnership," he told Show News, "making these partners more responsible for systems rather than parts."

Also under aggressive development at Embraer is the Legacy business jet, derived from the ERJ 135 but with more thrust, a new fuel system for enhanced range, winglets, a higher service ceiling, and additional avionics. The Legacy prototype made its first flight on March 31 and is undergoing testing with an eye to certification and first deliveries in the third quarter. Embraer had 63 Legacy orders on the eve of the Paris show, 32 are firm and 31 options.

With the Legacy, Embraer brings its competition with Canada's Bombardier from the regional to the business aircraft arena. The two are in dispute before the World Trade Organization, where their respective governments have been arguing over alleged unfair subsidies for half a decade. "The problem that we are facing is not a legal problem. It is not a technical problem," says Botelho. "It is a political problem," he says, and as such will require a political solution. WTO trade rules, he says, "are not feasible for the emerging and developing countries."

Like other aerospace companies, Embraer is working to boost its aftermarket services business. Partnerships will be key there too as the company seeks to exploit the Internet for parts and warranty support.

On the military side, Embraer is working on a new trainer, the AMX-T, a derivative of the AMX dedicated ground attack fighter, with Alenia. Venezuela has agreed to buy eight AMX-Ts; other likely customers are the Brazilian and Italian air forces, which already operate the AMX.

Embraer is also hoping, in partnership with its European shareholders EADS and Dassault, to satisfy Brazil's requirement for an F-X supersonic fighter. If that comes to fruition, says Botelho, Embraer will have access to technology that could eventually allow development of a Brazilian supersonic business jet.

By Rich Piellisch