C 390 Czech Air Force In The Sky scaled
Last week, the Czech Ministry of Defense (MoD) signed a contract to acquire two Embraer C-390 Millennium multi-mission transport aircraft.Â
These two NATO-standard aircraft will modernize and enhance the Czech Air Force’s operational capabilities. They can perform various missions, such as tactical transport of troops, vehicles, and equipment, medical evacuation, firefighting, disaster management, humanitarian support, and air-to-air refueling.
This deal followed several other NATO countries’ orders. The announcement uses interesting language: “This acquisition will benefit both the Czech Air Force and the local aerospace industry.” This is a key item. Offsets are standard in deals, but definitely in defense deals. Brazil got offsets for their purchase of the SAAB Gripen, for example.
Embraer is using the C-390 as an effective door opener next in India. With NATO members buying the C-390, India’s confidence in the aircraft rises.
India is becoming a most desirable market for Western aerospace companies. Airbus is also progressing on this issue, pioneering the path Embraer is taking. This kind of deal works. India has its “Make in India” policy, and companies are open to it.
The C-390 is a more complex aircraft than the C-295. Therefore, it offers India more advantages. Whereas the Airbus deal is with Tata, the Embraer deal will be with Mahindra. Having two Indian firms involved in these deals widens the benefits: more jobs, skills, and IP.
Having a FAL in India will be a significant next step for Embraer, as it will allow it to develop its supply chain, particularly in aerostructures, machining, composites, and software development. Then there’s a longer-term ambition we haven’t heard about yet.
Embraer’s ambition is to follow another path pioneered by Airbus: FALs in key markets to offset currency and cost risks. Embraer has taken a small step with its business jet FAL in Florida.  And where better than India for their first commercial aircraft FAL outside Brazil? We opined on this before.
As Embraer continues to recover from the failed deal with Boeing, we see deliberate steps being taken to offset risk and continue growing. The company uses its C-390 as an effective door opener in crucial markets. First, it uses it in NATO to prove the aircraft’s capabilities and establish credibility. The C-390 has other key campaigns, not least in Saudi Arabia. India, though, will be the big win. Besides China, India appears to have an insatiable demand for commercial aircraft. This is the market everyone wants to be in.
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