Today we had an opportunity to visit Embraer’s Melbourne, Florida  plant.  The facility acts as a final assembly line for the Phenom line and the Legacy 450/500.   Embraer’s history in the business jet industry is impressive.  The company has only been making business jets for about a decade.

In 2000 Embraer took its ERJ135 and turned that into a business jet.  As opposed to Bombardier that took a business jet and turned it into an airliner.  For Embraer the experience was rewarding as they made a number of sales.  The buyers appreciated getting an aircraft that was made to run like an airliner, with close to 100% dispatch.  This was an unusual standard as business jets don’t get to fly that much.  The Embraer reliability was a hit.

But the first aircraft was not enough.  Embraer wanted to be a big player and they needed to add to their offering.  This meant going out and speaking to the market.  On every visit Embraer mentions the same thing – they listen to the customer.  And its plain that this has worked for them.

By 2005 the company had come up with a new family of aircraft to be called Phenom.  The clean sheet design put them at an advantage.  First they were coming with two light aircraft, the 100 and 300.  The competitive aircraft were instantly outclassed.  Embraer tells stories about customers coming up to their booth at the NBAA and offering their American Express Black Cards to put down deposits.  They sold 100 aircraft at the show. Not a bad opening play.

The first deliveries of the Phenom 100 came in 2008 and 2009 for the 300.  As of now, there are roughly 300 of both types in service.  The clean sheet design allowed Embraer to leverage its formidable IP.

The Melbourne facility is about to become Embraer’s exclusive assembly line for all Phenoms.  The company will also assemble their mid-size jets, Legacy 450 and 500 at the plant.  The first Legacy is already under construction (picture) with the next one to follow within a few months.

DSC_1134Embraer has developed various advisory boards to provide input and guidance.  The same approach is used for the airliner part of their business. Listening to customers means getting an assessment of the market and then defining the opportunity.  The Phenom came about this way after various fractional companies asked for a family of light jets.  Then came requests for a heavy jet, leading to the Lineage 1000.  After this the requests led the company to the Legacy 450 and 500.

Fly By Wire Impact

What these aircraft have by way of features is impressive.  For example, Embraer has deployed FBW extensively.  The company’s history with this technology goes back to the 1970’s and its role in the AMX fighter.  The company had worked with an outside vendor and learned a lot about the technology.  With each successive aircraft, Embraer added another small FBW feature.  This way it learned and could move into the role without an outside supplier, so that it now has a fifth generation FBW completely sourced from within.  FBW is a compelling technology, making flight much smoother, more efficient and also safer.  It helps that it also saves a lot of weight.  Similarly, Embraer has managed to add real lav doors to small jets.  It has big windows and access to baggage in-flight for the larger business jets.  They were also the first OEM with stone floors in the galley.  Although the stone is only 2.5mm thick, the look is outstanding.  The surface holds up well to wear and tear (carpets in kitchens don’t work on airplanes any better than they do at home).  The only thing that can damage the stone is lemon juice.

It’s not just FBW that demonstrates Embraer’s growing prowess.  They are highly acquisitive when it comes to any technology.  The first E-Jet was supposed to have a wing from Japan’s Kawasaki.   Kawasaki didn’t deliver the way Embraer wanted, so they went and learned how to make the wing themselves.  Embraer also learned how to make their own landing gear.

The building up of IP in this way has allowed Embraer to continuously drive new technology into its products.  They try to “take from the segment above and bring it down”.  Clearly there are all sorts of details to explain the various items involved, but the mantra is that they ensure the customer gets more value.  Embraer can sell for a lower price because it controls more of the supply chain than most of its competitors.  It can play the transfer pricing game, whereas competitors have to fight with a supply chain that wants to make a profit.

The sum of all the knowledge the company has managed to acquire means its KC-390 is a full FBW aircraft that can do what the C-130 can do, and maybe more.  But it will probably be cheaper.  If anyone thinks Embraer will stop at the KC-390, then they are not reading the tea leaves.  The KC-390 will be a Farnborough and is meant to send a signal.  Brazil may be in a mess, but Embraer is strong.  If the E2 is also in attendance, then even more so.

Embraer put its new plant in Melbourne just as NASA was winding down its employment up the coast.  Melbourne is based in an area called the “Space Coast”.  About 60% of its business jet sales are in North America, so the location made sense. Embraer not only found an airport that offered what they wanted, they also found the kind of skill pool they needed.  This skill pool is delivering interesting things, like a virtual reality room where a customer can walk through their jet before its made.  Embraer is collaborating with Canon on this technology.

DSC_1133

The company has 6,000 engineers.  They are rotated through all programs so that the company has one pool to draw from.  There is a regular rotation of assembly people from Melbourne to Campos. Embraer is determined to build the deepest talent pool it can.  Currently there are some 150 engineers in Melbourne with a goal to reach 200 by next year.  The company culture encourages cross pollination of ideas.  The person working on the cargo bay of the KC-390 previously worked on the Legacy cabin.  Company culture is also demonstrated by this mural.

DSC_1132You can make out that the picture consists of small blocks.  When you look closely you see this.

DSC_1131Each block is a personal picture of an employee.  That mural says that all the company’s people make up what Embraer is.  No visitor can walk away from this without being impressed with its corporate culture.

Embraer literally came from nowhere in the business aviation industry.  Last year they were rated as the business jet OEM with the highest overall customer satisfaction.  They beat Gulfstream, which came second.  They accomplished this in ten years.  Now they are able to offer customers something really compelling – a family of aircraft from light to heavy and four choices in between.   It has been an impressive performance and looks like maintaining its momentum.

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Addison Schonland
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Co-Founder AirInsight. My previous life includes stints at Shell South Africa, CIC Research, and PA Consulting. Got bitten by the aviation bug and ended up an Avgeek. Then the data bug got me, making me a curious Avgeek seeking data-driven logic. Also, I appreciate conversations with smart people from whom I learn so much. Summary: I am very fortunate to work with and converse with great people.

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