Embraer’s second and final test aircraft of its KC-390 program has made its maiden flight test with the company optimistic that it’s sale of 32 of the transport-tankers to Brazil will continue. Brazil, the aircraft’s only confirmed purchaser, is in the midst of political turmoil caused by a mass corruption scandal and slow economy. Further more, a decrease in government spending resulted in payments to Embraer ceasing for several months in 2015, denying the program $300 million in unpaid bills. Both parties have, however, now come to an agreement to continue payments and pay off the balance over the next four years.
Embraer optimistic on Brazil order as KC-390 makes progress
29 APRIL, 2016 BY: STEPHEN TRIMBLE WASHINGTON DC
Embraer has made several strides in the KC-390 flight test programme in the last week, but Brazil’s political turmoil has clouded the tanker-transport’s only contract in uncertainty.
Against a backdrop of a presidential impeachment process underway in Brasilia, the second and last KC-390 flight test aircraft flew on 28 April from Gaviao Paixoto, a remote airport in Sao Paulo state where Embraer develops and builds military aircraft.
The first test aircraft also has started a series of critical envelope testing, lowering and raising the rear ramp in flight, says Embraer chief executive Frederico Fleury Curado, speaking on a 29 April first quarter earnings call. The same aircraft also has opened and closed two other openings in-flight – the cargo door and the exit door for paratroopers.
“On the development side we’re very happy with where we are,” Curado says.
Embraer also is “optimistic” about the fate of the contract with the Brazilian air force, which calls for deliveries of 28 KC-390s beginning with the first three in 2018, Curado says.
But he acknowledges the political turmoil in Brazil and the domestic economy has imposed new constraints on the government’s spending budget.
However, Curado points to recent signs that the air force is honouring its financial commitments to Embraer. The programme was put on hiatus for several months in 2015 after the air force stopped paying Embraer, leading to more than $300 million in unpaid bills on the KC-390 programme. Embraer and the air force signed an agreement last August to resume payments and pay off the balance over the next four years. So far, the air force has been complying with the agreement, according to the accounts receivable data on Embraer’s balance sheet.
Embraer also has signed up commitments from five other countries to sell a combined 32 aircraft, but they have not yet been converted to firm orders. Those campaigns and those to other potential foreign customers will ramp up at the end of this year, Curado says.
See related post:
See details of KC-390: HERE