The day before this year’s LABACE show opened, Marco Túlio Pellegrini, president and CEO of Embraer Executive Jets, told AIN that Embraer’s aircraft offer Brazil a powerful facilitator of economic development. Speaking at Embraer’s new São Paulo offices, he said the country is feeling that it has reached the bottom of the current recession and that its currency feels more stable, having recovered somewhat against the U.S. dollar.
“Brazil is a large country, not well served by air, but the bizjet can help a lot to speed the recovery,” he said, adding that Brazil’s entrepreneurs are largely unaware of the potential time savings for their companies. Business aviation would allow them to visit several cities in a day when such a trip by airlines would take several days, if possible at all. He gave the example of a journey starting in São Paulo, with whistle stops in the capital Brasilia, Recife and Curitiba, then back to São Paulo.
Embraer’s ambition is to see more charter companies and FBOs emerge. A business model involving expanded use of business jets, many of them leased, could be a powerful catalyst to see the sector develop rapidly, with knock-on economic benefits, Pellegrini maintained.
“Today the charter business and traffic is low, but this could be an opportunity for everyone,” said Pellegrini. Embraer is touting its Phenom 300 as well suited to improving the quality and cost effectiveness of Brazil’s charter fleet.
Pellegrini concluded that business aircraft unit sales overall this year will likely end up around the same as last year’s. However, he lamented the fact that margins on sales do not appear to be holding up.
Dassault presented its new flagship Falcon 8X for the first time in Brazil at the LABACE show. The long-range jet will enter service in Brazil during the fourth quarter of this year if certification by the country’s aviation regulator, ANAC, proceeds as expected over the next two months.
The 6,450-nm 8X has the range to connect São Paulo to destinations as far afield as Moscow, which means it can also make all of Europe and the U.S. nonstop from the Brazilian city. “Feedback from the operational trials—cabin comfort, air conditioning and in particular cabin noise—was excellent, and indicates the aircraft is poised for a flawless service entry,” said Dassault senior vice president Olivier Villa. “Moreover, new innovations in aircraft insulation will allow us to further lower cabin noise compared to the Falcon 7X.” Production of the 8X is continuing to ramp up to meet growing demand. Serial number 429 is in final assembly at Dassault’s Mérignac production plant near Bordeaux in southwest France, and 15 aircraft in all are in the final completion phase.
“Brazil has shown strong demand for the 8X since we announced the program two years ago, with four of the first 20 aircraft scheduled to be delivered there,” commented Dassault Falcon president and CEO John Rosanvallon. “That’s a great sign of a Brazilian market that might be turning the corner for the better,” he commented.
The manufacturer believes that its Dassault Aircraft Services subsidiary in Sorocaba, an hour’s drive west of São Paulo, is “key” to Falcon success in Brazil. To meet the needs of South American customers, it recently added $3 million to the parts inventory there (taking the total beyond $7.5 million), and has continuously added repair capabilities since 2009.
Bombardier sees demand for 790 new business aircraft in Latin America over the next decade. According to the Canadian airframer, Latin America, which will see an average economic growth of 2.3 percent a year, is the third largest market for business aviation and a relatively mature market for business jets, with Argentina, Brazil, Mexico and Venezuela accounting for 80 percent of the existing fleet of 2,015 aircraft.
Bombardier’s Latin American fleet consists of 570 aircraft, equating to a 28-percent market share. The manufacturer noted the Challenger 350 and Global 6000 are its best selling aircraft in the region.
“Latin America received 10 percent of the world’s business jet production last year,” a company spokesman told AIN. “Deliveries in Latin America are expected to remain steady over the next few years as the region’s economy continues to improve.”
Of the 790 predicted aircraft deliveries, 80 percent will be in the light and midsize class, with an overall value of $20 billion, Bombardier’s forecast stated. The light category will account for 50 percent of all Latin American deliveries over the 10-year period with 390 aircraft valued at $4.5 billion, while 275 midsize jet deliveries are forecast over same period, with a value of $8 billion.
It’s not that aircraft aren’t being sold today in Brazil and other parts of Latin America, but that transactions are taking longer to conclude, according to Gulfstream Aerospace. “We haven’t seen a big decrease in discussions about [new] aircraft; the difference has been that customers are taking longer to make a decision,” said Fabio Rebello, regional senior vice president for sales in Latin America. “There are still factors that make it uncomfortable to make a decision [to purchase] but we are now looking at a better horizon that will allow us to move on.”
Gulfstream showed the G280, G550 and G650ER at LABACE. “We want to show that the G280 is a regional aircraft that can reach the whole of Latin America nonstop, or the U.S. with one stop,” Rebello told AIN. “The G550 can fly direct to Europe and the G650ER can go direct to the Middle East.” Gulfstream believes that Latin America’s vast geography plays to the strengths of its products. Two of its key markets, the São Paulo region and Mexico, are separated by a flight of 10 to 11 hours, prime territory for larger, longer-range aircraft.
“In Brazil lately the indicators are that people are getting more confident and believe they have reached the lower end of the economic situation, so this makes us hopeful that it will get better,” commented Rebello. “In fact, tough business conditions create opportunities for us because companies there feel they have to reach out more and more to find new markets outside the country, taking advantage of factors such as the exchange rate,” which favors Brazilian exports.
There are now around 200 Gulfstream jets based in Latin America. In June 2014, the manufacturer boosted its customer support network for the region by opening a service center in Sorocaba, Brazil, to supplement facilities in Venezuela and Mexico. It has four field service representatives in Brazil and Mexico.
For the first time, at this year’s LABACE Brazilian aviation services provider TAM Aviação Executiva displayed the full Textron Aviation product line. The SĂŁo Paulo-based company was appointed as the country’s designated Beechcraft dealer in February, taking over the role from LĂder, and since then it has sold examples of all the airframer’s offerings, including the Baron, Bonanza and King Air. TAM has been a Cessna distributor for three decades, and added Bell helicopters to its product lineup in 2004.
In February, Brazil’s civil aviation authority (ANAC) certified TAM AE’s new maintenance center at Aracati in the northeastern State of Ceará. It began operations as the largest business aircraft maintenance park in Latin America, capable of servicing up to 30 aircraft simultaneously. Combined with the company’s operations in Belo Horizonte, Brasilia and JundiaĂ, near SĂŁo Paulo, it brings the company to 500,000 sq ft of shop space. Last year, Textron appointed the company an authorized service center for the King Air, and more than 1,000 of the aircraft are currently in operation in Latin America, with the work being performed at the JundiaĂ facility.
Brazil generally, and São Paulo in particular, have long represented a true hotspot in the global rotorcraft market. Demand may have cooled of late but that didn’t deter Bell Helicopter from bringing a trio of its latest models to LABACE: a VIP-configured Bell 429, the latest 407GXP and a mockup of the new 505 single.
Speaking to AIN after signing another 429 contract with an undisclosed Brazilian customer, Jay Ortiz, Bell’s vice president for Latin American sales, indicated that the local market might now be in recovery mode. “Relative to years past, the market is down but we are getting success with what [business] there is and we are seeing signs that the market is coming back,” he stated. “We’ve seen sales activity picking up in the last month. We normally see an uptick at this time of year. There has been concern about the state of the economy but the concerns were not well founded.”
That said, Ortiz did acknowledge the demand-suppressing effect of the continued weak oil price and the resulting reduction in offshore exploration and production activity. At the same time, plans for government investment in new helicopters has also slowed but, according to Bell, has merely been delayed rather than cancelled. “The VIP market continues to be robust and in some cases people are looking to upgrade their aircraft,” he said.
For Bell, Argentina has been a bright spot in the continent since the country’s December 2015 election, which brought what is widely acknowledged to be a more business-friendly government to power. One specific factor here has been regulatory changes making it easier to move U.S. dollar currency out of the country and relaxation of rules governing the importation of aircraft.
A customer support facility is now under construction in the Argentinian capital Buenos Aires. It will be operated by local authorized maintenance provider Rotorway.
