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Embraer actively seeking firm KC-390 MRTT sales from partners
August 18, 2017
Photo credit: Embraer

Embraer actively seeking firm KC-390 MRTT sales from partners

Brazilian aviation giant Embraer has been seeking a firm overseas sale for its KC-390 multi-role tanker and transport (MRTT).

Embraer had hoped to convince the Swedish Air Force to select the KC-390 for supplanting its Lockheed Martin C-130H Hercules transport aircraft. However, Sweden opted to keep its C-130Hs in service until the early 2030s, effectively pushing the prospect of a transport aircraft purchase into the 2020s. For the time being, Sweden does not think it is cost-effective to replace its C-130Hs.

Although Embraer has 28 domestic orders from the Brazilian military, it has yet to convert five letters-of-intent (LoIs) for 32 aircraft into firm sales. Argentina (six), Chile (six), Colombia (12), Czech Republic (two) and Portugal (six) have each signed LoIs. For Embraer, converting these intended sales into firm orders would instill external confidence in the platform and build scale.

Embraer is aiming to capture a sizable portion of the legacy C-130B/E/H-user market. However, while the KC-390 is increasingly showing its versatility – with successful dry-refueling trials in February – its status as a new platform could be a disadvantage against the C-130. Lockheed Martin is confident in the idea that existing C-130 users would prefer a new-generation C-130 (i.e. “only a Herc can replace a Herc”) which, while a costly acquisition, would bring assured performance, capability and reliability.

Moving forward, Embraer will receive support from the Brazilian government, which will establish a credit-line for Brazilian defence exports. Under the plan, prospective buyers could receive financing plans – for the entirety of the purchase – of up to 25 years, with a five-year grace period. This should be an effective tool for generating interest among cost-sensitive and developing world markets. KC-390 launch customers and partners will also benefit from co-production provisions.

Thus far, NATO members (e.g. Germany) and close U.S. partners (e.g. New Zealand) have opted to select U.S. hardware, such as the C-130J and P-8, respectively, to supplant legacy systems. Embraer’s prospects will be stronger among countries outside of those realms.

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