Embraer Exploring the Military Transport Aircraft Market

Apr.21.07 | About: Embraer S.A. (ERJ)
Embraer Has Military Transport Aircraft Under Study:

Embraer (NYSE:ERJ) confirmed, at a press conference held today, during the Latin America Aero & Defense [LAAD] conference, in Rio de Janeiro, that it has been studying the possible development of a military transport aircraft. If it is actually launched, the EMBRAER C-390, as it is called, will be the heaviest airplane ever produced by the Company and will be able to transport up to 19 tons (41,888 pounds) of cargo. The new project will incorporate a number of technological solutions developed for the successful EMBRAER 190 commercial jet. As a medium-sized military transport jet, the EMBRAER C-390 will have an ample cabin, equipped with a rear ramp for transporting a wide range of types of cargo, including wheeled armored vehicles, and will have the most modern loading and unloading systems.

The military market is quite different from commercial aircraft, and Boeing (NYSE:BA) and Airbus are already fighting bitterly over the larger jet orders in both military and commercial segments. However, as Toyota and Daimler demonstrated, it is often easier to come in at the low end and move up than to move down from high end products into more economical lines.

We also suspect there are a large number of smaller governments who would like to place their military orders with an underdog rather than an American or European firm that might leave them with a bad taste of imperialism.