Tuesday, April 19, 2016

Behind Embraer's Milestone

Fractional ownership provider Flexjet took delivery of Embraer’s 1,000th business jet on April 19, a major milestone for the Brazilian manufacturer.

Embraer Executive Jets celebrated a milestone of its own today when Cleveland-based Flexjet took delivery of Embraer’s 1,000th business jet, a midsize Legacy 500, the fourth of its kind to join the Flexjet fleet. The milestone comes slightly more than a decade after Embraer fully committed to the business aviation market.

The company’s first business jet program, the Legacy, was officially launched in July 2000 during the Farnborough Air Show, and the first aircraft was delivered two years later. It was built on the successful EMB-135 regional airline platform and featured, among other things, the largest baggage compartment of any business jet at the time and the robust standards of commercial aviation that Embraer brought to the business jet market.

At an event where there are more press conferences scheduled on any given day than any self-respecting journalist could cover on his/her own, Embraer’s announcement that it planned to enter the business aviation market was one of the more news-worthy press conferences at the show. The announcement was met with considerable skepticism. The general sense among the trade press, in particular, was how could this Brazilian commercial and military airframe manufacturer possibly hope to compete against established iconic institutions like Cessna, Dassault, and Gulfstream that dominated the field?

But it forged ahead, and in 2005 reaffirmed its commitment to the market with the creation of a new business unit specifically for the development of a broad portfolio of innovative, in some cases revolutionary purpose-built jets. It also marked the implementation of Embraer’s highly successful diversification strategy. It first clean-sheet design was the Phenom jet family, which was introduced in 2008 and 2009; the model 300 now dominates its market niche. Other innovative aircraft have followed that have allowed Embraer to become a strong competitor in the midsize and super-mid-size categories as well.

That is what has made Embraer such a fascinating OEM (original equipment manufacturer) to follow since its refreshingly bold announcement 16 years ago—the idea that that this new market entrant would be so audacious to think it could challenge the status quo. The aviation industry is better off for it, and so are business aviation users. It should also be a constant reminder to players who are much older—and instructive for Embraer as well—that competitive position is no birthright. Take your position in the marketplace for granted, be lulled into a false sense of complacency, and you’re liable to find yourself playing catch up. Make no mistake; there will always be room for the proverbial better mousetrap.

As a market research analyst recently observed discussing the Brazilian OEM, “Hats off to Embraer.”

(Tony Velocci - Forbes)

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