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Brazil seeks more aviation sales in Africa

Aug. 31, 2011 at 3:32 PM   |   Comments

RIO DE JANEIRO, Aug. 31 (UPI) -- Brazilian aircraft manufacturer Embraer is seeking to expand its international aviation markets with focus on Africa, where its jets' fuel efficiency, prices and payments terms are likely to have an edge over competitors.

Embraer's E-190 jet has already scored successes in Asia, with China emerging as a major buyer for the aircraft. The company earlier unveiled plans to enter the defense aviation market as well to compete with major manufacturers in the United States, Europe and Russia.

The latest African customer for Embraer's passenger jets is Kenya Airways, a major operator in East Africa and beyond, which will buy 10 of the Embraer E-190 aircraft and have the option to purchase more afterwards.

Embraer secured the deal in competition with Boeing as Kenya Airways launched a 10-year plan to expand its operations across the African continent. The airline plans to double its fleet and extend its network to more cities around Africa.

Neither side revealed the deal value which was estimated to be worth up to $4 billion based on the market value. Embraer will deliver the jets in the third quarter of 2012, ahead of the delivery of five Boeing 787 Dreamliner jets, scheduled for the end of 2013.

The E-190 seats up to 114 passengers in a four-abreast layout and has secured more than 1,000 firm orders from 60 airlines, with more than 750 aircraft in operation worldwide.

The aircraft, launched in 2004, is a larger version of the E-170 and E-175 family flying on a larger wing, bigger horizontal stabilizer and a new engine, the GE CF34-10E. The E-190 is in competition with the Bombardier CRJ-1000, smaller mainline jets including the Boeing 717-200, 737-500 and 737-600, the Airbus A318, and an upcoming Bombardier C series.

Embraer has already secured a growing market for its executive jets in Africa.

Kenya Airways Managing Director Titus Naikuni said the airline's Embraer E-190 fleet will help consolidate its position as a leading carrier linking African cities and develop Nairobi as a major hub, connecting Africa to the rest of the world.

Analysts said the airline likely saw the Embraer purchase as a cost cutting option and an answer to the volatility of crude oil prices. Embraer says its E-190 offers fuel savings of up to 30 percent when compared with U.S. competitors.

Embraer has secured sales of about 130 of the aircraft in 17 African countries, including Egypt, Nigeria and Libya under Muammar Gadhafi.

Mathieu Duquesnoy, Embraer's vice president for Middle East and Africa markets, said the Kenya Airways deal promised that "our E-jets are instrumental in the growth of the airline industry in sub-Saharan Africa." However, Kenya Airways and other African airlines are still having to deal with limited availability of qualified pilots and other skilled aviation staff.

In May Embraer named the Nigerian Barbedos Group Limited as its executive jets authorized sales representative for West Africa. Based at Kaduna Airport in Nigeria, the group operates a Legacy 600, and is marketing Embraer's entire line of executive jets in Cameroon, Equatorial Guinea, Gabon, Ghana, Nigeria, and Senegal.

"We are excited about this new partnership in West Africa with the Barbedos Group as Embraer's sales representative. Our joint expectations for the African market are encouraging," said Colin Steven, Embraer vice president, marketing and sales for Europe, Africa and the Middle East executive jets. "The Phenom 300, Legacy 600 and Legacy 650 are already in operation on the continent. We are confident that the Barbedos Group will assist us in further increasing our presence in the region."

Embraer's portfolio of executive jets consists of seven aircraft: the entry level Phenom 100, light Phenom 300, midlight Legacy 450, midsize Legacy 500, super midsize Legacy 600, large Legacy 650, and ultra-large Lineage 1000. The manufacturer says the aircraft range offers cabin sizes that are well-suited to the most diverse demands, allowing for greater work productivity and better usage of valuable travel time in comfort and privacy.

Embraer's push in Africa follows recent sales in Asia. On Aug. 11 the company delivered the first of its E-190 jets to China's CDB Leasing Co., Ltd. at the company's headquarters in Sao Jose dos Campos, Brazil. The aircraft will be operated by China Southern Air Holding Xinjiang Co., a branch of China Southern Airlines, which is the largest airline in China and the third in the world in terms of traffic volume.

CDB Leasing Co., also known as CLC, has ordered 30 Embraer E-190s, including 20 firm orders and 10 options, all of which will be operated by China Southern Airlines.

The aircraft will operate in China's Xinjiang Uyghur Autonomous Region, which has developed its civil aviation industry in recent years and is rated as the center of one of China's most developed regional aviation networks.

Embraer plans to deliver another E-190 to the Chinese by the end of this year as part of an existing plan to develop Xinjiang capital Urumqi as a major aviation hub serving western China.

"This deal with CLC starts an important partnership for Embraer and will help to further expand our E-Jets fleet in the region," Paulo Cesar de Souza e Silva, Embraer's president for commercial aviation said.

Embraer has found an increasing number of markets for the E-190 in both industrialized and developing countries. The company has U.S. units in Fort Lauderdale, Fla.; Nashville; and Melbourne, Fla.; units or offices in France, Portugal and Singapore.

CDB Leasing President Yu Shunming said the Brazilian jet would "contribute to the market development of China Southern Airlines and the development of China's regional aviation."

The Embraer 190 went into operation in the Chinese market in 2008. About 40 of the jets are in service in the country. Embraer says it has an edge over conventional regional jets because of the aircraft's design and 2,400-mile range.

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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