Tuesday, October 19, 2010

Embraer Gets $1 Billion Order From Net Jet

NetJets announces $1bn order from Embraer
By Rohit Jaggi in Atlanta
Published: October 19 2010 01:41 | Last updated: October 19 2010 01:41
NetJets of the US, the leading fractional jet operator, has announced an order worth more than $1bn for light jets made by Embraer of Brazil.

The firm order for 50 Embraer Phenom 300 aircraft and provisional order for 75 more represents the first time that NetJets has ordered aircraft from the Brazilian manufacturer.

beyondbrics: Embraer lands $1bn NetJets order - Oct-19

Clouds of recession begin to disperse - May-04

NetJets: Giant of Europe is braced for a bumpy ride - May-04

Jet prices: Market split overshadows optimism - May-04

Europe set to lead new business jet sales - May-03

Business aircraft makers face severe test - Feb-08

The order, announced on Monday on the eve of the US National Business Aviation Association annual convention in Atlanta, also represents a statement of confidence from the world’s foremost fractional operator about the direction of a sector that has been struggling for some two years in the financial downturn.

A survey of the business aviation sector released on Sunday by Honeywell Aerospace, the leading aviation supplier, said there had been just three deliveries of aircraft to fractional operators in the 18 months to the middle of this year.

“We think the worst is behind us,” said David Sokol, president and chief executive of NetJets, said on Monday. “It’s still a tough economic climate but it’s certainly stabilised.”

“We’ll complete the year substantially profitable, and through September this year we are significantly net of new owners.”

The aircraft will be built to an exclusive NetJets specification and called the Phenom 300 Platinum Edition.

“We were very open to changes,” said Frederico Curado, president and chief executive of Embraer. “We see it as an opportunity to improve our own product.”

The NetJets aircraft will come on top of an existing backlog of about 500 Phenom 300 and smaller 100 aircraft, split roughly equally between the two types.

The Phenom 300 was certified at the end of last year. Capable of carrying eight or nine passengers, it is substantially larger than its stablemate the Phenom 100, which can be configured for up to six passengers and had its first delivery at the end of 2008.

NetJets in 2009 cancelled an order worth $2.6bn with Hawker Beechcraft. On the value of the Embraer order, Mr Sokol said: “We have not given out a precise figure but it will be something in excess of $1bn.”

The first 50 aircraft are due to be delivered over the three years starting in 2013. Mr Sokol said about 20 per cent of the aircraft would be going to NetJets Europe.

NetJets currently has Hawker Beechcraft and Cessna Citation aircraft in its small-cabin fleet. It is aiming to have only two aircraft types in this sector, and Mr Sokol said that the company will be retiring older aircraft.