Brazil eyes Boeing, Airbus aviation market

Nov. 29, 2010 at 5:11 PM   |   Comments

RIO DE JANEIRO, Nov. 29 (UPI) -- Brazil is investing heavily in its aviation industry and hopes to become a contender for a significant share of the Airbus-Boeing market already crowded with rival manufacturers from China, Russia, Japan and even Canada.

Aviation industry statistics released Monday showed that Brazil, already an experienced manufacturer and exporter of executive jets, passenger aircraft and transport planes, plans to take on larger players in the aerospace industry.

Brazil's rise, fueled by a national income growth of more than 6 percent and rising demand in its own aviation sector, follows aggressive marketing by manufacturers that pose a direct challenge to Boeing and Airbus. Brazil is now the third-largest commercial aircraft producer in the world, partly due to growth in domestic demand.

Brazil's vast geographic area has fueled expansion in domestic air travel and with that growth in manufacturing, the data showed.

A comparison of the performance of the Brazilian aerospace industry with that of the United States, world leader in aerospace production, showed that Brazil outperformed U.S. manufacturers between 1999 and 2003, only to fall back again, Daniel Vertesy and Adam Szirmai said in a report.

Recent investment in the Brazilian aviation industry showed that Brazil continues to vie for pre-eminence in the market. Its best known brand, Embraer, is no longer the only major player.

The Brazilian aerospace industry now includes affiliates that are "world class players in their market niche, thanks to its high technology capabilities and the quality of its products," the Aerospace Industries Association of Brazil said.

Brazilian aviation companies are involved in aeronautics, space and defense design, manufacturing, sales, customer support and services.

The aeronautical segment offers a variety of products including airplanes, helicopters, structural segments, engines and parts and air traffic control systems, said the association.

The defense segment offers aircraft designed to meet specific mission requirements and non-guided and guided weapon systems.

The space segment offers small satellites, payloads, ground systems, propulsion, sounding rockets and launchers. It also offers services related to the usage of satellite images, consulting and other specialized services, the association said.

The Dublin-based Research and Markets said in a report released Monday said, "The aviation duopoly of Airbus and Boeing is about the change forever. This is particularly true among the 100-seater airliners."

It cited aerospace programs in Brazil, Canada, China, Japan and Russia as the basis for its conclusion.

The commercial aerospace programs under development in those countries "will soon challenge the dominance of Boeing and Airbus for commercial aircraft between 100 and 210 seats," said the report.

Because this sector is forecast to include 16,977 new aircraft valued at over $850 billion over the next 20 years, a shift in production from U.S. and EU manufacturers to new competitors will have a significant impact on the United States, France, Germany, Spain and the United Kingdom.

Any business opportunity of such magnitude is always attractive in terms of employment, jobs, and is a target for politicians, said the report. Consequently, government support of aerospace is commonplace, as demonstrated by the WTO cases against Airbus and Boeing.

As politicians in Brazil, Canada, Japan, Russia and China examined the market for commercial aircraft, they have all sought to extend their national participation through financial support. "And while the WTO may strip Airbus and Boeing of certain funding mechanisms, they will find other ways to take their place," said the report.

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