Some of the top aircraft buyers in the world are persuading the European Union to approve Boeing’s acquisition of Brazil’s Embraer as part of its long-term strategy. The aircraft buyers’ concerns are that Embraer’s commercial business might struggle on the back of Airbus’ recent strategic acquisitions.
Airbus is Europe’s largest planemaker. It increased its controlling stake in Bombardier’s A220 regional jet programme. Initially, Airbus had teamed up with the Quebec government to acquire 33.5 percent stake in the A220 regional jet programme. Now Airbus plans to increase its acquisition to 75 percent. This in turn is anticipated to increase Airbus’ market presence and boost competition with Boeing.
The A220 was previously known as the CSeries. According to Bombardier, the sale would help the company to revive from the money crunch in 2015 and improve its financial stability. The stake acquisition will help Bombardier to reform its capital structure and close its exit from commercial aviation, media reports said.
Bombardier remains Embraer’s major regional rival. Aengus Kelly, chief executive of leasing giant AerCap, told the media, “Now you have got the heavyweight boxer in the ring with someone who is about seven divisions lighter — there is only one outcome. I think it’s a must: if Embraer doesn’t do it, it’s likely that Airbus will corner part of the narrowbody market which will be poor for the consumer.”
The European Union is expected to start an investigation into the Boeing-Embraer deal next week as soon as the necessary data is received, media reports said.