Embraer: The Brazilian Aircraft Manufacturer's Turnaround and Growth
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Case Details:
Case Code : BSTR243
Case Length : 31 Pages
Period : 1969-2006
Pub Date : 2007
Teaching Note : Available
Organization : Empresa Brasileira de Aeronáutica S.A
Industry : Aerospace
Countries : Brazil
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Please note:
This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
The Embraer - Bombardier Face-Off
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Competition in the market for regional jets intensified in the late 1990s. Until
the launch of the ERJ-145, Bombardier had been the dominant player in the
regional jet market, with its family of CRJ aircraft. (Bombardier's CRJ-100,
delivered to Lufthansa in 1992, had been the first 50-seat jet aircraft in
aviation history.) At the end of 2005, Bombardier had more orders and deliveries
than Embraer. But Embraer had more orders on hand. Besides, the net increase in
the number of orders over the previous year was higher for Embraer than for
Bombardier. The regional jet market had also been growing very rapidly since the
mid 1990s (According to Fortune, a prominent business magazine, the market for
regional jets had grown by 1,000 percent in Europe and around 1,400 percent in
the US between 1995 and 2005)...
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Business Jets and Microjets - The Emerging Trend
In the early 2000s, analysts were predicting a growing market for microjets -
small aircraft with a takeoff weight between 5000 and 10,000 lbs, seating less
than 20 passengers. These aircraft were usually bought by companies for their
higher level executives, or by operators of air taxi services, although some
were bought for personal use as well. Business jets, on the other hand, were not
necessarily small, although they too were used for similar purposes...
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The Outlook for Embraer
Embraer was one the largest and most successful companies in
Brazil. In the years 1999, 2000 and 2001, it was Brazil's
largest exporter. According to the company's website, between
1995 and 2005, Embraer had accounted for eight billion dollars
of Brazil's trade balance.
Analysts acknowledged that Embraer contributed significantly to
Brazil's economic development and had had a positive impact on
the country's international image... |
Exhibits
Exhibit I: The Aviation Industry and Profiles of Major
Aircraft Manufacturers
Exhibit II: Embraer's Products
Exhibit III: Embraer: Key Performance Indicators
Exhibit IV: Brazil and its Economy
Exhibit V: Deliveries and Order Backlog: Regional Jets Versus Turboprops
Exhibit VI: Orders and Deliveries of Regional Aircraft
Exhibit VII: Embraer: Revenue by Region and Segment
Exhibit VIII: Embraer's Restructuring
Exhibit VIII A: Embraer's shareholding pattern as of December 30, 2005
Exhibit VIII B: Embraer's shareholding pattern after the restructuring
Exhibit VIII C: Embraer's capital structure after the conclusion of the
first stage of restructuring
Exhibit VIII D: New Embraer's structure after the Merger
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