Embraer’s Multinational KC-390 Tactical Air Transport Program

KC-390 concept

April 9-13/13: For Sale. Embraer Defense & Security uses the LAAD 2013 expo to officially announce that the KC-390 is finalized and available for sale on the global market, with a 23-ton capacity and a maximum cruising speed of 465 knots (860 km/h). Engineering drawings are being released to suppliers, and Embraer maintains its promise to hold its 1st flight by the end of 2014.

Hopes of landing the plane’s 1st sale at LAAD were dashed. Embraer | Flight International.

April 3/13: KC-390′s origins. Defense News interviews Embraer CEO Luis Aguilar, which provides an interesting insight into the plane’s origins:

“When we thought about this airplane, it was the first time we looked at the international market also, not just the Brazilian requirements…. We looked at the market and then came back to the Brazilian Air Force to talk with them about what they think about their cargo airplanes for the future. They said they were probably going to replace with more C-130s, and we started talking and showed them we were able to develop something in a very feasible way. It took two years working together to launch and sign the contract. It was a much more sophisticated process. We are on schedule, and I think we have a great chance to sell abroad.”

April 2/13: Forecasts. Flight International takes a closer look at Embraer’s evolution, from its 2012 dependence on major aviation projects for 75% of its defense revenue, to a projected figure of just 58% by 2020. Domestic security and surveillance offerings are expected to grow in relative importance over that time, thanks to experience and products developed under Brazil’s $400 million SISFRON project, its 50/10/40 Haripa UAV partnership with Avibras and Elbit Systems, etc.

There are rumors that the LAAD 2013 expo will see Brazil announce the initial production order for 28 planes, but the larger question is how many orders Embraer can expect over the longer term. Rebecca Edwards of Forecast International says Embraer hopes to convert all of their MoUs into 60 firm orders by the end of 2013, and sees potential for production of 98 KC-390s by 2021, and up to 234 by 2027. The Teal Goup, on the other hand, sees most of the KC-390′s target market locked up in the USA, and only 25 planes built by 2021. Given a break-even production run of 120, Embraer has to hope that FI’s prediction is closer to their 2021 reality. For Teal, the key to the KC-390′s success is a price point in the $50 million range, but that won’t be easy:

“One factor which could drive up prices is that the Brazilian government has mandated the use of as many local suppliers as possible, depriving programme managers of the ability to choose the best components at the lowest possible cost, [Teal's] Aboulafia says. Local subsystems tend to cost more than their international counterparts because of economies of scale and development costs. “It’s not a killer, it’s just something that hobbles designers, especially when they’re trying to keep costs down,” he says.”

Teal sees the KC-390 as more of a straight cargo plane than the C-130, with higher load capacity, modern features like fly-by-wire, and a faster cruising speed. The C-130′s use of turboprops is better for avoiding foreign object damage from unimproved landing strips and for low altitude operation, which makes them better suited to roles like special forces support. Flight International.