Embraer eyes major aircraft deals in India and U.S.

Embraer is taking an optimistic view of two major ongoing sales campaigns in India and the United States. According to CEO Francisco Gomes Neto, the company’s confidence is tempered by its recognition that competition in both markets is fierce.

The Brazilian planemaker reported third-quarter revenue of R$12.1 billion, up 11% year over year and a record for the period. Net income attributable to controlling shareholders, however, fell 41%, to R$366.7 million, reflecting higher financial expenses related to the mark-to-market valuation of shares under its long-term incentive plan, as well as taxes during the period. Operationally, the company continued to see strong demand for its jets.

India is one of Embraer’s biggest bets, as it negotiates the sale of commercial and defense aircraft to the country. According to a Reuters report, IndiGo, India’s largest airline, is in talks to buy 100 Embraer jets, with options for an additional 50. The aircraft manufacturer said it does not comment on ongoing negotiations.

Embraer has been expanding its investments in India in recent years. In 2025, the group opened an office in the country and signed agreements with local parts manufacturers. These companies will help supply Embraer’s plants in Brazil and could become production partners in India, depending on the outcome of negotiations there.

“We are optimistic and realistic at the same time. We believe we have the best product [the KC-390]. But the competition will come down to price. The same applies to the commercial aviation business. We have a strong case for winning in India, but we understand the challenges,” Gomes Neto told Valor.

On the commercial aviation front, the Indian government has shown strong interest in promoting regional air travel through a program known as UDAN, which offers tax and infrastructure incentives. In March 2026, it announced a new version of the program aimed at developing 100 airports using existing airstrips that are not currently served by commercial airlines. The new phase will involve an investment of 121.59 billion Indian rupees (about R$6.3 billion) over eight years.

Embraer has indicated that, if it receives orders by the end of this year, it can deliver the first aircraft by the end of 2028. The company also said that, if it secures orders for at least 200 aircraft, it could consider bringing a commercial jet production line to India. That would be the first E-Jet production line outside Brazil.

Another ongoing campaign involves the sale of the KC-390 to the Indian government, which has launched a procurement process for 40 to 80 aircraft. According to reports in the Indian press, final bids were initially due this month, but some groups requested an extension, and the deadline was pushed back to January. Embraer’s main competitors include Lockheed Martin, the manufacturer of the C-130 Hercules.

In the United States, Embraer is also negotiating the sale of the KC-390 to the government. Unlike in India, however, there is no formal procurement process underway. Seeking to gain access to the market, the Brazilian planemaker has partnered with Northrop Grumman to adapt the KC-390 to meet the requirements of the U.S. Air Force and allied forces.

According to Gomes Neto, the third-quarter results’ highlight was growth across all of the company’s business units. “This diversification across segments creates important synergies and helps us navigate different market dynamics,” he said. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) totaled R$1.63 billion in the quarter, compared with R$1.276 billion a year earlier. The EBITDA margin increased by 1.8 percentage points, to 13.5%. Embraer raised its forecasts for net revenue and cash flow for the year.

One challenge that remains is the complex supply chain, with delays affecting parts such as engines and fuselage components. According to the executive, parts availability in the first nine months of this year improved by 25% compared with the same period last year. “Some problems shift from one area to another. We are in a better position in executive aviation. Commercial aviation is more challenging. Will we solve everything next year? No. But we are increasing production every year,” Gomes Neto said.

The executive also highlighted efforts to improve the commercial aviation business profitability. Initially, Embraer’s E2 aircraft operated on tight margins because of discounts, and the market questioned whether the E2 program would succeed. “That was the question, and it is no longer a question. Sales in 2025 and 2026 have made it clear that the aircraft delivers benefits. We ended September with a backlog of $15.8 billion in the commercial aviation business alone. Now the focus is on improving profitability by renegotiating older contracts signed during the pandemic. We are also reviewing the division’s cost structure,” he said.

The commercial aviation division currently has an operating margin of about 2%, and the goal is to raise it to 5% by 2028.

*By Cristian Favaro — São Paulo

Source: Valor International

https://valorinternational.globo.com/