Aircraft makers Boeing and Embraer are engaged in
discussions about "a potential combination," the companies said in a
joint statement Thursday.
"There is no guarantee a transaction will result from
these discussions," the companies said. "Boeing and Embraer do not
intend to make any additional comments regarding these discussions."
A merger between the two plane makers would transform the
aerospace industry. But a joint venture, rather than a Boeing acquisition of
Embraer, appears more likely since any transaction would be subject to the
approval of the Brazilian government.
On Friday, Brazilian president Michel Temer told the
newspaper Folha de Sao Paolo that while he would welcome foreign investment, he
would oppose an acquisition of Embraer.
"Under no circumstance will it be sold," Temer
said.
Richard Aboulafia, an aircraft industry analyst with the
Fairfax, Va.-based Teal Group, said that a joint venture between Boeing and
Embraer would make a great deal of sense. First and foremost, he explained, the
companies could work together to market and support Embraer's family of
regional E-Jets -- a market segment in which Boeing is not competing.
They could also work together to enhance Embraer's cockpits
and to market military jets.
If Boeing and Embraer were to form a partnership it would be
viewed by many as a response to the agreement that competitors Airbus and
Bombardier made in October to partner on what had been Bombardier's C Series
program for 100- to 150-seat aircraft. Under the agreement, Airbus is become a
50.01% owner of the C Series. Bombardier will retain 31% ownership while
Investissement Quebec, the province of Quebec's economic development arm, will
own 19%. In its majority-ownership role, Airbus will provide procurement, sales
and marketing for the CS 100 and CS 300 aircraft.
Aboulafia said that a partnership between Boeing and Embraer
could be a boon to the market of 70- to 90-seat regional jets.
"In terms of the traveling public the upshot is that
Airbus and Bombardier doesn't do anything for regional jets," he said. "The
C Series really isn't a regional jet. But if there really is a [joint venture]
here you could see more support and marketing for Embraer regional jets."