Cold War 2.0 opens markets for the KC-390 – 04/13/2023 – Market

The main product of Embraer’s defense division, the KC-390 Millennium tactical transport and aerial refueling aircraft has benefited from global tensions resulting from the Russian invasion of Ukraine and the intensification of Cold War 2.0 between the US and China.

The Brazilian company is close to conquering two more clients in NATO, the western military alliance, and is aiming for expansion in the largest defense market in the world, the USA.

During LAAD, the main military fair in Latin America that ends this Friday (14) in Rio, delegations from Slovakia and Austria deepened talks to acquire an uncertain number of aircraft. Earlier, Embraer and Swedish Saab had announced a partnership to sell the KC-390 to the Nordic country.

The Slovakian and Austrian delegations also addressed the issue at the governmental level —as it happens all over the world, military sales pass through the blessing of governments, when they are not deals signed between States as in the case of the Brazil-France agreement of 2009.

The European case is self-explanatory. Vladimir Putin’s attack on Ukraine has led to a rearrangement of Europe’s defense priorities, with some 20 countries announcing increased military spending and the end of neutrality for Finland, which joined NATO, and Sweden, which is in the queue.

In the case of transport aviation, the continent has 160 medium freighters, 140 of them of the revered American model C-130 Hércules, which have been flying since the 1950s. Vienna operates three of them, while Bratislava has two C-27 Spartan, made in Italy.

Within the scope of NATO, Embraer has already sold five KC-390s to Portugal, another five to the Netherlands and two to Hungary. There is no fixed price per aircraft, as each deal involves different packages of support, after-sales and the like, but Budapest will pay US$ 300 million (R$ 1.5 billion) for two aircraft, for example.

With regard to the US, the challenge and opportunity are greater. The obvious obstacle is that Washington wants to see the C-130 flying longer, with constant updates from the manufacturer Lockheed Martin. Perhaps the most famous transport plane in the world, the four-engine turboprop Hércules, however, is a design from the 1950s, with inferior performance to the twin-engine jet KC-390.

That said, Embraer partnered with the American L3Harris in 2022, the first step to offer the product in the US: the government requires a local partner, as Sierra Nevada is in the case of the Super Tucano light attack fighter it sold to the country.

In September, it will send the KC-390 for the second time to a military exercise in the USA, an occasion that serves as a “test-drive” of the model for potential customers. The focus here is less on the transport capacity, but on the model’s aerial refueling capability — the K in its acronym indicates this function, and its cargo-only version is called the C-390.

The reason is the Indo-Pacific, the core theater of Cold War 2.0 between the US and China. The whole region is full of smaller and more rustic airstrips, which in a case of conflict would not be able to receive the large US strategic refueling planes, based on commercial jets such as the Boeing-767 and others.

The KC-390, in turn, is smaller and more agile in this environment, even though it has less autonomy. This point of sale has been made in the US, which in any case does not have open competition for this type of plane at the moment.

The freighter can also, like what happened when the Super Tucanos were sold to the Afghan Air Force before the Taliban’s return to power in 2021, equip regional US allies.

President of Embraer Defense and Security since December, executive Bosco da Costa Junior declined to comment on any of the European proposals. Regarding the American market, he claims that entering it would be a turning point in the airline’s career. “We’re all over the world,” he told Sheet.

The primary customer of the KC-390 is the FAB (Brazilian Air Force), which participated in the development of the project and later, in 2009, announced the purchase of 28 aircraft. Last year, after a tough negotiation that became the most acute crisis between the manufacturer privatized in 1994 and the Air Force that created it in 1969, the deal was reviewed and now 19 units will be acquired, the sixth of which will be delivered soon .

In a public speech at LAAD, he stated that Embraer and the FAB “are fully aligned”, commenting on the association with Saab about the freighter, which also involves the promotion of the Gripen fighter assembly line at Embraer’s factory in Gavião Peixoto (SP) to a regional export center —the Swedes compete for the supply of planes in Peru and Colombia.