The Kingdom of Sweden has formally signed an agreement to acquire four Embraer C-390 Millennium transport aircraft, joining with Austria and the Netherlands in a joint agreement that includes training and support. The transaction also includes 7 options for the trilateral group.Â
The Brazilian jets will replace aging C-130H turboprops as Sweden’s utility support aircraft. The deal was confirmed with Embraer Defense & Security receiving approval from The Netherlands, the lead nation for the trilateral group.
The Royal Netherlands Air Force already has 5 C-390s on order and Austria 4 aircraft on order. The seven purchase options are “paving the way for future acquisition by other European nations” according to Embraer. We expect additional sales to NATO countries in the near future, based on our intelligence sources.
“This acquisition marks a major milestone in the modernization and strengthening of the Swedish air force,” says Swedish defense minister Pal Jonson. “I am convinced we will increase our operational efficiency while enhancing interoperability with our European partners.”
The addition of Sweden to the roster of C-390 customers in Europe brings the list to 8, including Austria, the Netherlands, Czech Republic, Hungary, Lithuania, Portugal, and Slovakia. Â
Embraer is also pushing the tanker KC-390 version of the aircraft and will be competing for the Next Generation Air-refueling System (“NGAS”) with the US Air Force Air Mobility Command. That competition includes multiple competitors with conventional and blended wing designs. Embraer has indicated that if successful, it would likely invest in assembly facilities in the United States for the program. With more than half of the aircraft sourced in the US from 59 different suppliers, and a US assembly facility would significantly raise US content for the airplane. Embraer already builds business jets in its Melbourne, Florida facility.
The C-130, first introduced in the 1956, has been the standard for military utility transports for more than 69 years. While periodically updated, its design is now quite dated and the C-390 now appears poised to be its replacement. Having both NATO and the US adopting the C-390/KC-390 as a standard would boost Embraer’s position in the military aircraft market.
The Bottom Line
One by one, Embraer is signing deals to for the C-390, which is becoming the “de facto” NATO standard for transport aircraft. With joint training and support among several NATO countries, it is poised to take over from the aging C-130H. With significant market momentum, Embraer appears ready to take a substantial share of the military transport market, including several potentially large customers in the 2026-2030 time frame. Â
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