Luis Carlos Affonso, Senior Vice President, Corporate Aviation, Embraer
Embraer’s Luis Carlos Affonso, famed for seeing the Brazilian airframer’s new family of 70- to 110-seat airliners to market, has been given the daunting challenge of developing a whole new family of business jets to compliment the super-midsize Legacy.
Acknowledging that Embraer is entering a fiercely competitive market where it has no existing customer base, Affonso told Show News how the company plans to market its new business jets.
“There are no subsidies whatsoever.”
—Louis Carlos Affonso,
Embraer svp for corporate aviation
Marketing Strategy
“Our sales force will sell the aircraft direct from the factory. We may eventually assign some authorized representatives, but that is not the plan for the moment.”
Outreach
“On top of sales teams will use all means to reach the customers. We will use the Internet, magazines and special events to reach potential customers. Expect to see us taking part in shows where we wouldn’t have been in the past, such as (the Experimental Aircraft Association Convention at) Oshkosh.”
Differentiation
“Our two new jets (the VLJ and LJ) are very differentiated — even our competition has recognized that. In terms of cabin space, performance, and reliability, they are unique at their price points. Why are the products different? Because we have talked to the customers as to what is needed. That’s what we did on the Embraer 170 and 190, and created a differentiated solution through good listening and lots of creativity.”
Embraer last month announced its entry into the light end of the business jet market with two models, the Very Light Jet and the Light Jet. The company forecasts that its VLJ, entry-level and LJ sales will account for 1,000 aircraft, or 36% of the world market over the next 10 years.
The aircraft will cost $235 million to develop, according to Luis Carlos Affonso, Embraer’s newly appointed svp for the corporate aviation market. Both the VLJ and the LJ are designed for high utilization and high availability rates, taking aim squarely at the nascent air taxi market which could, if it develops, double world demand for this size aircraft.
The straight-winged, $2.75 million VLJ is offered for six-occupants with an enclosed lavatory at the rear, or for eight-passengers with no potty and optimized for flights of under one hour. The cabin is wider and taller than those of the Eclipse 500 and Cessna Citation Mustang, but slightly smaller than the Cessna CJ1’s. First deliveries are planned for mid-2008.
The $6.65 million, swept-wing, wingleted Light Jet carries eight to nine occupants in a cabin slightly wider and taller than the Citation Encore’s and slightly smaller than that of Raytheon’s Premier 1. It will have a maximum cruising altitude of 45,000 ft and a high cruise speed of 450 kts. Projected range is 1,800 nmi against the Premier 1’s 1,000 nmi. First deliveries are set for mid-2009. —Mike Vines
Customer Service
“We will offer a menu of outstanding services we call Integrated Solution designed to help the customer go efficiently from A to B. These will include a service centers network, total care packages from tip to tail, training — that is key, finance, insurance, and trade-ins. This is something the market needs and the customer is ready to pay for the service.”
Partners
“The interest from qualified potential partners to team up with us on the most expensive parts is extremely high — the service centers and how to expand on those. We will be able to set these up in a limited timeframe with only a small investment from Embraer (using our partners’ existing operations).”
Manufacturing
“Embraer is very proud of its lean manufacturing and is used to volume production of small aircraft with small margins.”
Engine Selection
“Pratt & Whitney Canada was the best offer overall, with smallest technical risk, a very good solution for worldwide fleet support, low maintenance costs and durability. And of course the commercial financial package was also good. So overall their package was the best one.”
Suppliers
“The avionics competition is now going on. All other major systems are yet to be selected — landing gear, environmental systems, flap system, wheels and brakes, interior and associated systems like illumination. On the big ones we want suppliers to share the risk with us. But on small systems it is better to go for off-the-shelf.”
Risk-sharing
“Pratt & Whitney Canada is a risk-sharing partner and will get its return from engine sales. It is putting its own money into developing the engine, and it is also supporting part of our development. So when we say our total investment is $235, the sources are the partners, the financial institutions and Embraer’s cash flow. The other important thing is there are no subsidies whatsoever.”
Orders
“We will start accepting orders in the next few days.”
