Brazilian manufacturer Embraer (EMBJ3.SA) expects to finalize new contracts for defense aircraft in the Middle East, including intergovernmental markets, following a historic order for military C-390 aircraft from the United Arab Emirates, the director of its defense division said on Monday.
The defense division director, Bosco da Costa Junior, told Reuters that the contract for up to 20 C-390 military transport aircraft with the United Arab Emirates, the twelfth country to select this aircraft, positions the Brazilian aeronautical manufacturer to achieve more sales with its allies.
“The Middle East is a strategic region for us,” he said, adding that Embraer is promoting the C-390 and the Super Tucano light attack aircraft in the region.
Costa Junior highlighted what he called a “differentiated” contract with the United Arab Emirates for 10 C-390 aircraft and 10 options – the first time this model has been selected by a buyer in the Middle East.
“I do not believe these 10 options were included in the contract just for the sake of having options,” he said. “I think we will see intergovernmental mechanisms … with a country facilitating the entry of other nations into the C-390 operators’ club,” he added, refusing to name potential buyers.
Intergovernmental markets have played a key role in C-390 sales in Europe, with Sweden joining an agreement led by the Netherlands and Portugal obtaining purchase options for orders placed by other European NATO member countries.
Embraer’s shares rose by 2.5% following the agreement with the United Arab Emirates, outperforming the Brazilian benchmark index Ibovespa, which fell by 0.9%. Itau BBA analysts estimated the value of this firm order at $1 billion.
AGIN FLEETS In the Middle East, Embraer had campaigned to replace Saudi Arabia’s aging C-130 fleet from Lockheed Martin, but CEO Francisco Gomes Neto told Reuters earlier this year that the country’s prospects for an order had dimmed.
The United Arab Emirates currently operates both the C-130 and Boeing’s C-17.
Costa Junior said that ongoing global conflicts do not directly accelerate sales, but they do prompt governments to focus more on operating costs and asset availability, influencing fleet renewal decisions.
Embraer estimates global demand for 400 to 480 aircraft in the military transport segment over the next 20 years, mainly to replace aging fleets, with around 260 aircraft worldwide approaching or exceeding 45 years of service.
“These aircraft will need to be replaced,” he said, noting that the C-390 is preferred to operate in any region.
