Brazil’s Embraer Builds US$ 50-Million Plant in the US to Make Executive Jets

Embraer's Phenom 300 Embraer, Brazil's aircraft maker, announced that the company's profits more than doubled in the second quarter, driven by strong sales of midsize commercial jets and the company's new, popular executive jets.

Empresa Brasileira Aeronáutica SA, which is the world's fourth-largest plane maker, reported second-quarter profits of 176 million Brazilian reais (US$ 113 million), up 120% from 80 million reais (US$ 51 million) in the same period a year ago.

Second-quarter revenue was 2.7 billion reais (US$ 1.7 billion), up 22% from 2.2 billion reais (US$ 1.4 billion). Embraer said its backlog hit a record US$ 20.7 billion as of June 30, including US$ 6 billion in orders for executive jets.

The Brazilian airplane manufacturer announced that it plans to invest an estimated US$ 50 million for the establishment of a new facility in the United States dedicated to its executive jet business.

The new 150,000-square-foot state-of-the-art facility will house a final assembly line, the first for Embraer in the U.S. It will be capable of producing both the Phenom 100 and Phenom 300 executive jet models, and will have a paint shop and a delivery and customer design center.

Embraer delivered 52 aircraft during the second quarter, up from 36 in the year-earlier period. The company also reaffirmed its estimate that it will deliver 195 to 200 jets this year, including 10 to 15 of its hot new Phenom executive aircraft.

Embraer announced in June that it is holding preliminary negotiations to sell the US government eight 314-B1 Super Tucano light attack and training planes for use in Iraq. The company also confirmed that it sold one of the propeller-driven planes to a subsidiary of Blackwater Worldwide, the world's largest security contractor and the target of harsh criticism for its conduct in Iraq.

Embraer added new customers to its firm order backlog in the second quarter of 2008 such as ETA Star Group, from Dubai and TRIP Linhas Aereas, one more Brazilian airline that will fly Embraer jets. The Embraer 170/190 jet family backlog accumulated a total of 847 firm orders and 827 options.

Embraer formally introduced its new Embraer midsize and Embraer midlight executive jet programs, which were recently approved by the Company's Board of Directors. The Embraer midsize and Embraer midlight jets have been named the Legacy 500 and the Legacy 450, respectively, forming the Legacy family, along side the successful Legacy 600, already in operation.

An estimated US$ 750 million will be invested in research and development for the new models, which will enter service in the second semester of 2012 and 2013, respectively.

Embraer finished assembling the first Phenom 300 jet at its Gavião Peixoto plant in São Paulo, Brazil. The rollout preceded a series of ground tests to be conducted in preparation for the jet's first flight. Two weeks after the event, the Embraer Phenom 300 successfully took to the air on its maiden flight, starting its flight test campaign. It is expected to enter service in the second semester of 2009.

The company received final approval from Russia's Interstate Aviation Committee (IAC) for the 37 to 50-seat ERJ 145 regional jet family, comprised of the 37-seat ERJ 135, the 44-seat ERJ 140, and the 50-seat ERJ 145.

These regional jets now have the way open to operate in all of the Commonwealth of Independent States (CIS), which, besides Russia, includes Armenia, Azerbaijan, Belarus, Georgia, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Ukraine, and Uzbekistan.

The aircraft maker has also received certification from the Civil Aviation Administration of China (CAAC) for operating the Embraer 190 and Embraer 195 jets in mainland China.

The firm signed a contract with TRIP Linhas Aéreas for the sale of five Embraer 175 jets. The deal also includes options for ten more, plus purchase rights for another 15.

Furthermore, Embraer signed a contract for the sale of two Embraer 190 jets to the Brazilian Government for transporting official personnel. The aircraft will be configured specifically for this purpose and will be operated by the Special Transportation Group (Grupo de Transporte Especial – GTE) of the Brazilian Air Force (Força Aérea Brasileira – FAB), which serves the President of the Republic, Ministries, Presidential Departments, and officials from the Legislative and Judiciary Branches.

Embraer has also formally joined the Global Compact program developed by the United Nations for the purpose of mobilizing the international business community to adopt basic values for its business practices in the areas of human rights, labor relations, environmental protection, and anti-corruption.

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