Boeing, Airbus Carve up Embraer & Bombardier, Chinese Aircraft Makers Still Learning the Ropes

After a series of legal battles and political complications, it seems Boeing will finally be allowed to take control of Embraer’s commercial aircraft division. Boeing will pay $4.2 billion for an 80% share in the division. It will also have to finance a 51/49 minority joint venture with Embraer to help market the KC390 military transport aircraft outside of Brazil.

The deal is still pending, waiting for the approval of anti-trust authorities worldwide: Chinese regulators have already announced they will issue a ruling “no sooner” than Q4 2019, most likely in retaliation for the Huawei fiasco. And given the absolute importance of the Chinese aviation market, expect a lot of diplomatic maneuvering from all parts involved.

Embraer is the worldwide leader in what were once called “regional airliners,” meaning short- or medium-range twin-engined aircraft carrying up to 130 passengers. Think of them as the smaller cousins of the Boeing 737 and Airbus A320 airliners which are the prime movers of air travel worldwide.

The Embraer E-Jet family, introduced in service in 2004, has had a phenomenal success, with 1,486 deliveries and 114 firm orders as of December 31, 2018. And the revamped E-Jet E2 family, featuring new wings, new engines and host of other improvements, already has 268 firm orders.

Boeing’s pending acquisition of the division is one of the largest deals in recent commercial aviation history. While anti-trust authorities are likely to approve the deal with the usual laundry list of recommendations and mitigations, it’s another step on the path of commercial aircraft manufacturing consolidation worldwide.