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Embraer Chief Sees Bizjet Shakeout, Long Recovery

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Joseph C. Anselmo/Paris janselmo@aviationweek.com

The business jet market could undergo a shakeout and won't recover to peak delivery levels for at least a half decade, Embraer's top executive says.

"We won't see delivery numbers like we saw in 2007-08 for many years - at least five," Frederico Curado, president and CEO of the Brazilian jet manufacturer, told AviationWeek editors during an interview at the Paris Air Show today.

Embraer, which is seeking to become a major player in the market with its new Phenom jets, intends to be "one of the survivors" of the sharpest downturn the industry has ever seen. The market will be more segmented and could have fewer manufacturers, he says, but Embraer is not looking to acquire a struggling competitor. "We tend to be more oriented towards organic growth," says Curado, though he does allow the company is more likely to make acquisitions to expand its services business.

The sudden and severe collapse of demand for business jets last fall has stunned business jet manufacturers and their suppliers. "It's shocking to see what happened to Cessna," says Curado, referring to that company's 50% cut in production rates.

Clay Jones, CEO of supplier Rockwell Collins, says business jet manufacturers were telling him as recently as October that they had no plans to cut production. "I have never seen a market fall so far and so fast as the business aviation market in the last six months," Jones says.

Curado says Embraer was also surprised. "We just didn't see it coming," he said, adding that in hindsight the company should have paid closer attention to broader economic trends and their potential to spark a downturn in demand. "In the future, we have to look a little bit beyond this industry."





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