How Boeing, Embraer benefit from a combination
Boeing's smallest 737, the 7 MAX, at 138 seats is a sales dud (for reasons having nothing to do with C Series).
Click Like to Follow Fliegerfaust Facebook page to get the News ASAP / Share to share this post now.
December 26, 2017 - LeehamNews
Potential synergies exist between Boeing and Embraer which may be important to development of the next new, clean-sheet airplane for both companies.
Last week, both firms acknowledged a Wall Street Journal report that talks have been held about a combination of some kind. No details were reported about what this would look like. The Brazilian president was quick to say the government, which holds veto power over any merger or acquisition of Embraer, won't approve any deal that means EMB ceases to be a Brazilian company.
Joint ventures or minority ownership structure appears possible.
What are the potential benefits for Boeing and Embraer?
As Boeing continues its work to decide whether to launch the New Midmarket Aircraft (the NMA or, unofficially, the 797), obtaining risk-sharing partners has been challenging, aerospace analysts previously told LNC. A partnership with Embraer just might be the business relationship needed.
It's been widely reported that Boeing is considering a two-member NMA family, 220- and 260-seats, with a range of 4,500nm to 5,000nm.
Bernstein Research, which has been skeptical of the market demand for such an airplane, recently floated the possibility Boeing might redefine the mission to top out at 4,000nm.
LNC is skeptical of this hypothesis. At the time of the Bernstein note, checks in the market with the supply chain and customers indicated no change in what Boeing was telling them.
If Boeing is interested in a 4,000nm airplane, a smaller wing might make sense. Boeing originally planned a multi-wing approach for the 787. The 787-8 and -9 shared a wing. The 787-3, intended to be a domestic version, had a different wing. The -3 was later dropped as delays, production, designs and costs soared. The 787-10 originally was conceived with a different wing, but in the end no change was made from the 787-8/9.
Embraer chose to have a wing specific to each of its three EJet-E2 family. One can easily envision Embraer, with its lower-cost wages, taking a major engineering role
Anaging 737 line for which the MAX is the last iteration, there will be a need for a new, clean-sheet design from 135 to 220 seats.