Embraer forecasts slow recovery for business aircraft, EADS expanding North American ambitions
Embraer President and CEO, Frederico Fleury Curado, speaking to AIN Online, stated that the company is not seeing signs of recovery in the business jet market and believes that a full recovery of the global banking system still has some time to go is. Any recovery will be “long and not necessarily steady, with ups and downs as the scenario gradually improves.”
Embraer: Business aircraft recovery “long and not necessarily steady”
The company, which recently launched several new light jets and executive and business aircraft, made “firm and swift” adjustments to its production levels at the end of 2008 and in early 2009, reducing output of commercial and larger business aircraft. It has continued to ramp up production of its Phenom very light jets.
The company saw a “sharp decline in new sales and many customer requests for deferrals and cancellations”. Embraer has cut approximately 4,000 workers since the beginning of the global financial crisis, the majority of them from the commercial aircraft segment.
EADS announced the appointment of Sean O'Keefe as CEO of EADS North America, under efforts to expand its presence in North America markets, particularly the US. His appointment is effective 01-Nov-2009.
Current EADS North America Chairman and CEO, Ralph D Crosby Jr, will stay on as Chairman, with responsibility for overseeing EADS' role in its combined bid with Northrop Grumman for the US Air Force’s aerial tanker competition, which is worth at least USD35 billion. EADS has recently expressed concerns over what is believes is favouritism displayed to Boeing over cost information provided to the company.
According to EADS CEO, Louis Gallois, the appointment of Mr O’Keefe is a reinforcement of the North America operation, in line with the company’s “big ambitions” in the US, the world’s largest aerospace market. Mr O’Keefe was administrator at NASA between 2001 and 2005 and also served as Navy Secretary, Pentagon comptroller and CFO at the US Department of Defence.
Sales at EADS North America have increased strongly since the appointment of Mr Crosby in 2002, much of it through acquisition, but the company wants to be seen as an “American citizen” and eliminate some of the political tension associated with its presence in the US defence market.
Share prices at major manufacturers traded down notably on Tuesday, with Embraer losing 3.2%, Boeing down 2.9% and EADS dropping 2.6%.
Selected Aviation suppliers’ daily share price movements (% change): 20-Oct-09