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Geopolitical uncertainties have led defense planners to speed up decision cycles, Embraer CEO Francisco Gomes Neto says, as the Brazilian aircraft-maker looks to add to its backlog for the KC-390 tanker/transport.
“We have seen countries accelerating sales campaigns,” he said on Embraer’s second-quarter earnings call, pointing to decisions in the United Arab Emirates and Colombia, and a Greek plan to buy three of the aircraft through Portugal.
“We are working on other campaigns as well,” he says.
In India, Embraer is hoping to land a deal for 60 to 80 medium transport aircraft, with the government there yet to release the formal request for proposals. Embraer has said it could establish a second KC-390 final assembly in India to augment the one in Brazil, should it land an order for the air force. The deal would help lift Embraer output beyond the current plan to take KC-390 production up to 10 aircraft per year around 2030.
The U.S. could also land a KC-390 assembly line, he says, as the Brazilian OEM continues its pursuit of Pentagon business in partnership with Northrop Grumman.
Embraer reported a 12% increase in quarterly sales to $304 million even as it had no military aircraft deliveries in the period, linking the sales to revenue recognition on the KC-390. The defense and security backlog reached $6.1 billion at the end of June, almost 40% above the level at the end of the first quarter.
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