(MENAFN- ProactiveInvestors)
(NYSE:ADR) a Brazilian aerospace company delivered the 40th Phenom ‘300’ aircraft today as part of an order of 125 worth more than US$1 billion to subsidiary NetJets a business jet fractional ownership and rental provider.
The contract for the deal was signed in October 2010. The aircraft are operating in the NetJets fleet serving US and European customers and Europe as the Canadian powered Phenom 300 (Pratt & Whitney Canada PW535 engines) has gained a 57% market share in the category light business jets just five years after being launched into service.
"The Phenom 300 is the best-selling of our fleet and getting our 40th aircraft we hope to continue to bring more to our fleet" said NetJets’ Senior Vice President of Global Asset Management Global Procurement and Global Process Improvement Chuck Suma.
Nevertheless there has been a stagnation of the business aviation sector and has decided to stake its future by shifting to the military and security sector in view of a lack of growth as reported in its 2014 earnings release last March.
The company kept a comfortable level of profitability in 2014 with a gross operating profit (EBITDA) of US$829.6 million and revenue of US$6.3 billion. But continued sluggish sales of business jets which represent 25% of its activity and lower average prices for regional aircraft coupled with exceptional charges in the fourth quarter lowered net profit by 20% to 413.8 million dollars.
And according to ’s guidance declining margins amid virtual stagnation of sales are expected to continue in 2015 with revenues still expected to fall in the US$ 6 – 6.6 billion range. The Brazilian aircraft maker expects to deliver between 95 and 100 regional airliners against 92 in 2014 and 125 to 130 business jets (116 in 2013).
Nevertheless because of trade wars with other regional aircraft and business jets manufacturers such as () the Brazilian aircraft manufacturer expects to sell its high-end models and midsize models at lower margins. So will rely on the development of defense sector sales for growth.
is already the third largest manufacturer of commercial aircraft after and Airbus. Its flirtation with the military side of the industry will see it compete head to head with the likes of and in the United States.
Military already increased from 19% to 23% over the past year. has tested the KC390 its new military transport aircraft KC-390 which made its first flight last month while securing a with Saab to assemble the Swedish company’s Gripen fighters for the Brazilian army.
’s defense products extend beyond aircraft platforms to include radar and border security technology which it hopes to convince the Brazilian government to buy in order to tackle drug trafficking in the Amazon.
As the industry celebrates its achievements at the Brazilian air defense conference and show in Rio this week the government of President Dilma Roussef is confronting debt and scandal which has left the program in limbo.
Brazil's fiscal and political crises have left exposed because of the increased role played by the military to its bottom line which risks falling below its expectations.
This suggest that will be trying to secure customers beyond its borders a significant shift for the Sao Jose dos Campos-based company which has mostly exported products for the civilian market.
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