A220, Airbus will have little opposition before 2020
Since taking control of the A220 on July 1, Airbus has won 120 firm orders for the A220-300 with options for 60 more for a total of 180 aircraft. For its part Embraer, Airbus’ new rival, got firm orders for 43 E2-190s and E-195s with options for 22 more bringing the total orders to 65.
While it is true that Airbus has been in charge of the A220 for just six weeks and it is too early to draw a conclusion, it must be admitted Embraer is unlikely to succeed alone against Airbus. To fight Airbus, Embraer absolutely needs Boeing’s help. However, some developments over the past two weeks suggest that negotiations between Boeing and Embraer are far from complete and that their outcome is more than uncertain.
When disclosing its financial results on August 1, Embraer admitted that after signing the final agreement with Boeing, it will take 12 to 18 months to complete the transaction. This means that if there is an agreement over the next few months, it is very likely that it will not be completed until the beginning of 2020.
Information began to filter and the distribution of Embraer engineers would be the raison why negotiations are taking so much time. Boeing believes that the $ 3.8 billion payment does include the transfer of the entire Embraer engineering group to the new entity, which the Brazilian company opposes.
While the discussions stretch, the opposition to the transaction is organizing as unions and a group of left-wing MPs develop a new strategy to block the deal.
In the coming months, Embraer’s management will have to conclude negotiations with Boeing while taking care of opponents in Brazil. This is a lot to see and will leave little time to finalize negotiations with new customers.
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