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Boeing Walks Away From Embraer Deal



Admin Posted by nighthawk on 25 April 2020 - 19:50:56
Local Airport: CAX

After more than two years of negotiations, Boeing on Saturday terminated its proposed $4.2 billion deal to acquire the commercial jet business of Brazilian regional jet maker Embraer.

Boeing cited an inability to agree on final terms as it let a midnight Friday deadline expire. “Boeing exercised its rights to terminate after Embraer did not satisfy the necessary conditions,” the company said in a statement.

Source: https://www.seattletimes.com/business/boeing-aerospace/boeing-kills-its-4-2-billion-purchase-of-embraer/

Maybe not entirely surprising in the current climate.. but I wonder if it's a bit of a short sighted move? Now Airbus is the only one offering a family of aircraft that covers the complete market.

Premium Posted by Dougiehd on 26 April 2020 - 18:35:30
Local Airport: CMB

I suspect that as you said it is due to the current climate. Boeing is already taking a massive hit due to the MAX issues. They have how many aircraft parked pending delivery which may not be taken up and likely penalties to pay. Then there's the cancelled orders - MAX and others, those already cancelled and those to come. A slowdown in orders for new aircraft is inevitable in the months ahead. I think despite the product gap, they would struggle to finance it and maybe they might be better off using this time to look at a new narrowbody aircraft - they have been updating the 737 for too long.

On a separate note, there is a lot more Regional Jet competition looming - from China, Japan and Russia. Maybe it's not such a great deal just now.

Admin Posted by nighthawk on 01 May 2020 - 12:57:45
Local Airport: CAX

I can't see the Chinese / Russian jets getting many orders outside of their home countries. The Mitsubishi offering... possibly, but they have no reputation in aviation, so its going to be a difficult sell.

The bigger concern is Airbus though. The A220 has been selling a lot better than the Embraer E2 recently.. and there's a real possibility of this dominating the short haul market in the future. That's bad news for Embraer, but also for Boeing. If you're using the A220 for short haul flights... it makes sense to use the A320/321 for the medium hop routes.

Premium Posted by Dougiehd on 02 May 2020 - 17:11:45
Local Airport: CMB

Well if the SSJ is an indicator then yes the MC21 may struggle to get international customers though if it turns out to be reliable may pick up. China's Comac21 of course has a huge domestic market and once proven may do OK. Mitsubishi are of course a proven brand in other areas, but they have a lot of catching up to do though may benefit from the orders that will inevitably be postponed from 2020/21.

All that said - even if the Comac21 doesn't sell well overseas, the domestic sales will be losses to Boeing/Airbus, as will domestic sales of the MC21.

And maybe China and Russia will do ok. After all, 20 years ago who would have thought that one of the top regional jet makers would be from Brazil?




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