WASHINGTON — Brazilian firm Embraer hopes to spur growth in its defense sector through a combination of ongoing sales of its A-29 Super Tucano, an increased focus on border surveillance, and the official launch of its KC-390 multirole aircraft.
In a July 11 interview with Defense News at the Farnborough International Airshow, Jackson Schneider, head of Embraer's defense unit, said to expect defense growth over the coming years as more of its products hit the market.
Embraer ranks 55 among the Defense News Top 100 global defense firms, with almost $1.46 billion in defense business in 2014 — about 23 percent of its overall business that year. Schneider sees that growing in the coming years.
“I’m pretty sure that defense will grow and will be more representative and enlarge its marketshare in Embraer’s company to be more and more important for Embraer,” he said.
The company’s most reliable seller to global militaries has been the A-29 Super Tucano, a prop plane designed for light attack and surveillance. Embraer has sold around 230 of the planes, which have collectively logged more than 35,000 flight hours.
Schneider expressed confidence that there are more sales coming in the future, and while he said the company has not talked with the US Air Force about a potential A-10 replacement, he said the A-29 is ”a fantastic possibility to replace the A-10.”
But Schneider is quick to point out that growth will also come from a focus on its defense systems — in particular new border control systems. That includes a new surveillance radar with a range of 200 kilometers, which the company is positioning to do ground, air and coastal surveillance.
“I think this will be more focus in this year and next year,” Schneider said.
Another potential area of growth is unmanned systems. Although that is likely something years away, Schneider said the company was discussing such a development with the Brazilian Air Force.
KC-390 Key to Future
But the future of the company’s defense sector is tied heavily in the KC-390, which Embraer exhibited for the first time at this year’s Farnborough air show.
In March 2013, Paulo Gastao Silva, Embraer’s KC-390 vice president, told reporters he anticipated the addressable market for potential sales to be around 700 planes over the life of the program. At the same time, Luiz Carlos Aguiar, Schneider’s predecessor, said the plane could have a market worth $50 billion.
Three years later, Schneider declined to give a numerical estimate for the KC-390’s market, instead saying broadly that the design has a “fantastic possibility in the market.” He also said there is not a specific region of the world being targeted, saying instead the plane fits “for any nation in the world.”
“It is a plane for the United Kingdom. It is a plane for the United States. It is the best for any country who wants something like that,” Schneider said. “This is for me, there is no specific region in the world that is most suitable for the plane. Every country is a potential market.”
Talking with Schneider, it is clear he has extreme confidence in the plane’s design, often coming back to tout its speed and multirole capabilities. Asked why he is so confident the KC-390 will find a large market, he points to three things.
The first edge Schneider sees for the design is the multirole capabilities. He claims that you can switch from a cargo configuration to a medical evacuation configuration in “three, four hours,” with potential missions including search and rescue, special missions, fire suppression and both cargo and troop transportation, with a design that can land on unpaved roads if need be.
The second is the time frame of the design, which was conceived of between 2010 and 2012. Other cargo planes, he said, are much older — in some cases, 40 years or more — and while those planes can be updated, the airframes themselves eventually need to be replaced.
And his third point ties into the second — that the KC-390 is a new design means it has current technologies that will be relevant for a long time without needing an upgrade. And with that comes experience from Embraer’s 5,000-strong commercial airplane fleet — as well as an understanding of what off-the-shelf capabilities could be integrated into the design cheaply and easily.
“You’re talking to someone who has assembled more than 5,000 planes. We are using just the Airbus 320 engine [the International Aero V2500 design]. It is not proven? The avionics are Rockwell Collins — is it not proven?” Schneider asked rhetorically. “We are not implementing something [new]. When we designed this plane and we use it, a lot of commercial jet engineering in the design and conception of the plane, we transfer for the plane a lot of requirements we got from the regional commercial airlines.”
“We brought to the plane not only the best avionics, the best mission systems, the best navigation system — fly by wire by the way — but also we conveyed for the product all our experience in commercial planes,” Schneider said. “We have many commercial planes. All after sales, all the care we have in commercial planes that cannot stop, we transferred it for this plane, thinking our client[s] want to have the plane as much as possible without having problems.”
When you tie those things together, Schneider believes many services will find that the KC-390 is a cost-efficient solution with a wide audience. And that, in the end, may help the plane find customers.
"Normally, you say, 'No, the Air Force doesn’t care about the cost.' They care a lot about the cost! They care a lot, and they care more and more — to maintain this plane, to fly this plane, it will be cheaper than anyone else,” he boasted.
For now, however, there is only one customer for the plane — its home nation of Brazil, which has agreed to procure 28 of the designs, with the first one entering service early in 2018. At various points in recent years, Portugal, Argentina, Columbia and the Czech Republic have all verbally committed to buying the plane, but none have formally signed on. The plane is also a finalist for Canada’s fire-fighting requirement.
Which is why bringing the KC-390 to Farnborough was so important for the company, Schneider said. At the end of the day, no one wants to buy a plane that exists only on paper and promotional photos.
“They wanted to see the plane, they wanted to fly the plane, to see the plane before, and now they’ll have the possibility to do it,” Schneider said. “We believe after this first phase of interest or market analysis or even plane information, we will go for more concrete steps with some of the countries which are already talking with us.”