Sky's the limit for Embraer as aviation business set to take off

Just like Brazilian soybean and fruits that are known by the Chinese, Embraer is popular in China's civil aviation sphere. It is the third-largest supplier of civilian aircraft in the world and the biggest provider of regional commercial airliners in China.

The Brazilian industrial giant is the biggest maker of regional jetliners in the world. It has a robust presence in the Chinese civil and business aviation sectors, continuously servicing its clients with state-of-the-art products, according to the company.

"As a symbol of Brazil's advanced technologies and high-quality products, we feel privileged to have played a part in the rapid growth of China's aviation industry," said Guan Dongyuan, senior vice-president of Embraer and president of the company's China branch.

"This year, we celebrated the 70th anniversary of the founding of the People's Republic of China, the 45th anniversary of diplomatic ties between China and Brazil as well as Embraer's 50th birthday.

"Along with the economic and social development in China and the deepening of Sino-Brazilian cooperation, Embraer is determined to use its new products to better serve regional and business aviation in China, boost inter-regional connectivity and fuel the Chinese civil aviation sector's high-quality development."

Created by the Brazilian government as a state-owned enterprise in 1969 and privatized in 1994, Embraer is now the biggest exporter of high-tech products in the southern hemisphere.

Its core businesses include commercial jets, business jets, defense and security products as well as services and support. The company enjoys a global presence with plants, offices, service centers and maintenance facilities across the Americas, Africa, Asia, Europe and Oceania.

Embraer has delivered more than 8,000 aircraft to buyers around the world. About every 10 seconds a plane made by the company takes off somewhere. There are more than 100 nations and regions that use Embraer planes. More than 100 commercial airlines from 60 countries and regions have its jets in their fleets. Worldwide, the Brazilian aircraft help passengers take about 145 million trips each year.

In China, Embraer is one of the leading players in the commercial airliner business. Its planes fly 450 routes to 130 Chinese and foreign cities, helping travelers make about 200,000 flights each year. Currently, Embraer has received orders for 201 aircraft from Chinese clients. It has delivered 190 of them: 156 commercial airliners and 34 executive jets.

The company's jetliners are popular among major Chinese carriers such as China Southern Airlines, the largest airline in China by fleet size, as well as regional airways like Tianjin Airlines and Hebei Airlines.

Localization strategy

The most important reason behind Embraer's success in China, Guan said, is its localization strategy.

"The essence of globalization lies in localization. A localized team is able to understand local cultures and market demands and then adapt the company to them," he said.

From Embraer's entry in 2000, Guan and his local colleagues began to make use of their connections, know-how and expertise to develop the Chinese market.

Months later, their efforts paid off: Sichuan Airlines placed an order for five ERJ145 jetliners, marking the Brazilian aircraft maker's first sale in China.

In 2003, a joint venture by Embraer and the Aviation Industry Corp of China II, which later became a part of Aviation Industry Corp of China, was set up in Harbin of Heilongjiang province to assemble and flight-test ERJ145.

The Harbin factory was Embraer's first production facility outside Brazil and 98 percent of its employees were locals. This plant began China's cooperation with a global giant on aircraft assembly, before Boeing and Airbus.

"Embraer established an entire industrial chain at the Harbin plant and transferred its expertise in aircraft production to this joint venture, enabling it to become a genuine localized enterprise," Guan recalled. "As a result, jets made by the plant are as good and reliable as those built in Brazil. Users are very satisfied with their performance."

Before its phaseout in 2016, the factory built and delivered 41 ERJ145s and five Legacy 650 business jets to Chinese buyers. The factory was called "a model of South-South cooperation" by Chinese and Brazilian leaders. South-South cooperation refers to the exchange of resources, technology and knowledge between developing countries.

In 2006, HNA Group ordered 50 ERJ145s and 50 E190s from Embraer. It was the biggest order of civilian aircraft placed by a single Chinese carrier at that time.

In addition, Embraer values the training of local professionals and has continuously invested in this. Many specialists in China's aviation industry have taken part in the Brazilian company's training courses.

Huge potential

Looking at Embraer's future in China, Guan said there is huge potential for regional and business aviation businesses.

"Aircraft with 150 or fewer seats account for only 15 percent in the commercial airliner fleet in China. The percentage usually stands at 40 percent in developed countries," he said.

Guan said that forecasts by his company point to a demand of 1,390 commercial jetliners with 150 or fewer seats from the civil aviation sector in the next 20 years.

The Chinese government has issued a series of policies and measures to foster the regional aviation industry. This includes increased investment in infrastructure and favorable policies for new carriers that fly regional routes, the executive noted.

In May, Embraer's E190-E2 commercial jet, one of the world's quietest and most eco-friendly single-aisle passenger planes, performed flights in Qinghai province's Xining and Yushu to display its capabilities and performance in environments at a high altitude.

According to Guan, China has many airports on its plateaus, which need reliable passenger transporters. The executive is also bullish on the prospect of Embraer's business jet in the Chinese market.

"Business jets are gaining support from business circles and the public in China because their usefulness is being widely recognized," Guan said. "On the other hand, the government has gradually realized the importance of business aviation and so produced policies to boost the industry's development."

Guan said that the United States has about 12,000 executive jets, accounting for more than half of the global fleet. By comparison, China, the second-largest economy, operates about 500 such planes.

Attention and investment from the government to the business aviation sector will bring about more infrastructure and professionals, and encourage more companies to introduce executive jets to improve efficiency.

"We are convinced that the business aviation sector in China will embrace rapid growth in the near future and so does Embraer," Guan said.

(China Daily 10/25/2019 page7)