Quantity Goes From 28 to 22 Planes with Delivery Postponed Until 2034

Embraer has closed discussions with the Brazilian Air Force (FAB) after a requested reduction in the previously contracted production run for the manufacturer's multi-mission KC-390 aircraft. After working together to hash out a deal that would work for both sides, the total number of aircraft will be reduced from 28 to 22, with deliveries scheduled through 2034.

The new production rates are compatible with the FAB’s budget while allowing Embraer long-term stability in its production line. The deal has pushed delivery dates further out than originally anticipated while slashing the order quantity of the biggest customer for the new aircraft, which may not prove to be a great omen for the program. 

The Brazilian Air force was the launch customer for the KC-390, acting as a showcase for the first plane delivered in 2019. So far, only 2 other customers have stepped up to the plate, with a run of 5 planes for Portugal and 2 for Hungary. The multi-mission military transport is intended to fill the shoes of the FAB's C-130 Hercules, being able to fill a wide range of cargo functions wherever needed. According to interviews with commander of the Brazilian Air Force, Lieutenant Brigadier Carlos de Almeida Baptista Junior, the KC-390 fleet could ultimately number anywhere from 13 to more than 28 in the long-term. Last year, he told local papers that the service could make do with as few as 13, but backtracked after successfully negotiating the reduction, saying that the FAB would eventually need the full 28 planes or even more.  He said that funding had become a more pressing issue after the aircraft program took a 50% hit in 2021 that required financial triage. Baptista mentioned a shift in the political winds that favors military preparedness and mission capability over the health of national industry, allowing him greater leeway in his acquisitions even if it results in economic fallout . How the change bodes for the program remains to be seen, but young, new aircraft have had rockier starts and still managed to find eventual success. 

The first 5 aircraft have entered FAB service, but no word on an anticipated delivery schedule yet. Under the original deal, 3-4 aircraft a year were to be delivered through 2027, but extending them through 2034 likely means some planes will be diverted to other customers.  Lieutenant Baptista worries that the additional delay could result in the delivery of out-of-date, antiquated aircraft that aren't particularly needed by the time they're delivered. “Buying 28, we will only receive them in 14 years, it makes no sense for us or for Embraer. There are obsolescence processes to be analyzed," he said. 

In their statement acknowledging the change, Embraer seemed confident that the aircraft will find its footing in the market eventually. "The KC-390 can accomplish a wide array of missions, including humanitarian support, medical evacuation, search and rescue, and transporting and launching cargo and troops, in addition to aerial refueling. Bringing unique innovations in its category, the aircraft has been successfully placed in FAB humanitarian missions in Brazil, in the fight against Covid-19, and abroad, such as supporting victims in Lebanon and Haiti." 

FMI: www.embraer.com