Aircraft makers are circling Brazil’s Embraer weeks after Boeing ditched plans for a historic commercial aviation tie-up, people familiar with the matter said. Boeing axed plans to buy 80% of Embraer’s commercial unit in April, ending a planned move into regional jets that mirrored rival Airbus’ purchase in 2018 of a competing model developed by Canada’s Bombardier.
China’s state-owned COMAC plane-maker has voiced informal interest in co-operation with the world’s third-largest jetmaker, two of the people said. Russian aircraft manufacturer Irkut has also explored the issue, two others said, though the company denied any current interest.
India, another rising aerospace power focusing mainly on defense but with a huge civil market, has informally conveyed interest at government level while still studying the matter, sources said.
That places Embraer’s fate at the center of the so-called BRIC group of nations, with each honing aerospace strategies as Airbus and Boeing reel from the coronavirus crisis.
Embraer shares rose around 8% immediately after publication of the report, with trading halted momentarily in New York due to excess volatility.
Both COMAC and Irkut are developing aircraft to compete directly with Airbus and Boeing in the busy 150-seat market. China’s plans are considered the most advanced.
A deal with Embraer would add engineering resources and global support but also clash with smaller and commercially less successful regional jets developed by both countries.
A Russian industry source said Irkut’s ultimate parent Rostec is focusing on its existing MS-21, designed to compete with Airbus and Boeing, and Superjet regional aircraft.
Although it has invested heavily in parts and maintenance, India is the least visible suitor in commercial aerospace with no active project other than a 14-seater jet dubbed SARAS.
Embraer is seen as a one-off chance to re-balance India’s aerospace ambitions against strategic rival China. R.K. Tyagi, ex-chairman of state-run Hindustan Aeronautics, said he had written to the government urging it to move fast.
“Any country with ambitions will look at this. I feel this is a good opportunity. Valuation is down and if we get control of a modern, proven aircraft program, it is a big jump.”
Modi administration officials and a government think tank are preparing a strategy paper on Embraer but no formal approach has yet been made, an official aware of the plans said.