Embraer and Saab team up to sell the KC-390 in Europe – 04/11/2023 – Market

The Brazilian aeronautical companies Embraer and the Swedish Saab announced this Tuesday (11) the expansion of their partnership in the military area. They will offer the KC-390 aerial transport and refueling plane, star of the São Paulo manufacturer’s portfolio, to the Swedish Air Force and other European Air Forces.

The plane has already been adopted by three member forces of NATO, the western military alliance that the Swedes are trying to join in the wake of the Ukraine War. Customers are Portugal, Hungary and the Netherlands. “We can grow in several markets”, said the president of Embraer Defense and Security, Bosco da Costa Junior.

The companies already have a partnership in the production of the most modern version of the Swedish Gripen fighter, including the development of its version for two pilots. In all, 15 of the 40 planes purchased by Brazil will be made on the Embraer line to be opened this month in Gavião Peixoto.

Now, the idea is to use the integration achieved since the Gripen was chosen, in 2014, as a basis for exporting the plane to markets in Latin America —today, seven countries have versions of the fighter, Brazil and Sweden units of the most recent versions, the E (one place) and F (two places).

The fighter is already competing as an option for 12 new planes from Colombia. “We want to make the most of Gripen in Brazil”, stated Micael Johansson, President of Saab. He predicts that the useful life of the plane, in modernization cycles, will reach 2060.

He also prioritizes the second batch of Gripen for the FAB (Brazilian Air Force). The initial contract in 2014 of 39.5 billion Swedish kronor (with correction, around R$ 28 billion today) was for 36 aircraft, but it was expanded by 4 units last year, something under negotiation. The Force still wants 26 more planes.

The FAB started operating the first four fighters at the end of 2021. This year, four to six units should be delivered, a process that will initially last until 2027.

The companies also announced, during the LAAD-2023 military fair in Rio, that they are looking to work together on a future fighter aircraft program —the so-called sixth generation, as the Gripen is an advanced model of the fourth, but not the fifth, with stealth features like the American F-35.

There are problems here, given that analysts do not believe it is possible to enter this field alone, and Sweden left an initial agreement it had with the United Kingdom and other European countries — perhaps to return, with Brazilians as partners.

Closer to reality, impacted by the geopolitical change caused by the war, Johansson defended that the Gripen will not lose space with product due to the flood of F-35s that the US is providing to European countries.

Last month, the four Nordic Air Forces announced they would unify their operations, and only Sweden does not or will operate the American fifth-generation model. “I don’t exclude anything, I see the Gripen as a complement to the F-35 operating in the Nordic theater”, said the executive.

Closer to reality, however, is the issue of freighters. There is a demand to replace the fleet of 160 medium transport aircraft on the continent, most of which are four-engined C-130 Hércules propellers. In this niche, the KC-390 is currently seen as the best product in terms of cost-effectiveness and performance, but such deals basically depend on politics.

And the C-130 has been a mainstay of the American aerospace industry since the 1950s, being modernized from time to time. In the tense environment with Russia at war at its doorstep, Washington’s pressure on its minority NATO partners is not negligible.

In Brazil, the KC-390 is one of the aircraft most used by the FAB. Last year, there was a crisis between Força and Embraer, the most serious in 50 years, because the government decided to cut the purchase of 28 planes agreed in 2009.

There was criticism of the option, given that the FAB redirected funds to buy two Airbus-330s for transport, large aircraft for long-distance missions —less suited, in theory, to the Brazilian reality.

In the end, the ongoing renegotiation should leave the order for the KC-390 at around 20 aircraft. Costa Junior says that there is no more crisis. “The FAB has blessed this partnership, we are totally in line,” he said.

Embraer, as a group, had a net loss of R$953.6 million last year. Saab, Sweden’s largest armaments company, saw an operating profit of approximately BRL 622 billion in the same period, an increase of 22% before 2021 due to the war.