What Comes Next For Embraer?

What Comes Next For Embraer?

After Boeing and Embraer announced the end of their joint venture plans to cooperate on commercial aircraft yesterday, it was clear that Embraer felt it was wronged. Although indicating that it would seek damages, the Brazilian aircraft manufacturer was keen to partner with the American giant to sell its E2 jets as the A220 gains in popularity.

The end of the deal

Embraer claims that Boeing wrongfully terminated the joint venture agreement to get out of its financial obligations with the deal. These obligations have their origins from before the MAX crisis and current global downturn. However, Boeing says that Embraer did not meet some of the conditions leading to termination. Neither party offered more details, but Embraer is claiming for damages– most likely in the form of monetary compensation.

The E2 is not selling well

At the end of 2019, an Embraer report showed that the E2 family had not sold well. The larger E195-E2 had 165 firm orders with 47 options and seven deliveries. Meanwhile, the E190-E2 had 27 firm orders with 61 options and 11 deliveries. This left Embraer with a backlog of 192 E2 regional aircraft at the start of 2020 compared to the 185 order backlog of E175s and E190s. However, there were some orders not logged in that report– such as KLM Cityhopper’s E2 jet orders. This would increase the backlog slightly.

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