Companies

Embraer to sell 10 jets to China's CDB Leasing

(Agencies)
Updated: 2011-01-11 09:57

SAO PAULO, Brazil - Brazilian aircraft maker Embraer agreed on Monday to sell 10 of its best-selling commercial aircraft to the leasing unit of China Development Bank, in a deal worth about $400 million at current market prices.

Deliveries are expected to begin in the second half of the year, the Brazilian company said in an e-mailed statement. CDB Leasing will lease the ERJ-190 jets to China Southern, China's biggest airline and the world's third-biggest, the statement said.

"The deal ratifies the trust and recognition of the Chinese company in our range of products and the prospects for growth in the nation's regional aviation market," the statement quoted Paulo Cesar de Souza e Silva, Embraer's executive vice-president for commercial aviation, as saying.

The deal follows a letter of intent signed between Embraer and CDB Leasing in December 2009, and signals that orders for commercial jets were slowly recovering after the global financial crisis. An ERJ-190, which seats up to 122 passengers, costs about $40 million.

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Embraer's pipeline of firm orders plunged 23.5 percent to $15.3 billion in the third quarter of 2010 from $20 billion a year earlier and edged up only slightly from $15.2 billion in the second quarter of last year as airlines remained hesitant about global economic recovery.

Embraer has been beset by rising sales of aircraft by newcomers, including China's Comac. A large portion of Embraer's biggest Chinese order was canceled last year, and at the time analysts linked that to the rise of Comac.

Voting shares of Embraer, based in Sao Jose dos Campos, Brazil, gained 0.5 percent on Monday to 12.20 reais. Embraer's American depositary receipts fell 0.2 percent to $29.30. ($1=1.69 reais)