Azorra will buy 20 Embraer E190-E2 or E195-E2 regional aircraft and took options for 30 more – a deal valued at $3.9 billion at list prices.

Embraer Reintegrates its Commercial Jet Business

Jan. 26, 2022
Since the failure of its Boeing joint venture, the Brazilian OEM has been working to reintegrate commercial aircraft manufacturing – to restore skills and recover synergies.

Brazilian aircraft OEM Embraer reported it has completed the “reintegration” process for its Commercial Aviation business' main information technology systems and processes, without any disruption to its “essential operations.” The reorganization has been ongoing since May 2020 – when Boeing cancelled the nearly two-year effort to merge Embraer’s commercial business into a joint venture controlled by Boeing.

Embraer is a state-controlled manufacturer of aircraft for the commercial, defense, and executive aviation sectors. The Commercial Aviation was realigned in 2020 as a wholly owned subsidiary, amid various legislative and shareholders objections, anticipating the link with Boeing. The Boeing-Brasil Commercial venture was intended to produce 70- to 150-seat narrow-body jets for the "mid-market" commercial sector, meaning high-volume commuter and regional routes.

The commercial aviation sector is important to the organization – providing it the greatest opportunity for growth in a recovering aerospace industry. This week Embraer landed a deal with the Miami-based leasing business Azorra which will acquire 20 new E2 family aircraft and took purchase rights for 30 more aircraft – a deal worth a up to $3.9 billion for Embraer.

Also recently, Embraer sold two manufacturing plants for metallic and composite aerostructures in Portugal to Aernnova for $172 million, which will operate the plants under a supply agreement to deliver current production packages for Embraer aircraft.

And, Embraer entered into a purchasing, marketing and distribution agreement with AVIAN Inventory Management LLC and York Aerospace Solutions III for surplus Embraer commercial and business jet airplane parts. This new venture is planned specifically to accommodate Embraer’s long-term spare parts strategy, it stated, and AVIAN will consolidate all of Embraer’s worldwide surplus spare part inventory in a new facility in Orlando, Fla, starting during Q1 2022.

Embraer said reintegrating the Commercial Aerospace business has been a primary focus in the months since May 2020, in its strategy to optimize the organization’s skills and “recover synergies.”

“The reintegration ensures operational benefits and eliminates fiscal inefficiencies that an integrated, less complex, and more agile management can offer,” according to a statement.

"We believe that 2022 will be a year of growth and we are well prepared to harness the full potential of the company. So, the success of the reintegration of the commercial aviation business is another important step in the process of executing our strategic planning and will result in significant operational improvements and better profitability," according to EVP – Finance and Investor Relations Antonio Carlos Garcia.

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