Singapore Airshow

Embraer commercial aviation chief: We're in talks with Boeing, but there's been no offer yet

Key Points
  • John Slattery, Embraer's commercial aviation chief executive, told CNBC discussions are ongoing on a structure that might work for a potential tie-up between Embraer and Boeing.
  • The third-largest plane maker wants to broaden its reach in Asia and is aiming to sell its aircraft to more airlines in the region, Slattery said.
Wait for the golden shareholder on any Boeing-Embraer deal
Wait for the golden shareholder on any Boeing-Embraer deal

Discussions on a structure for a potential tie up with plane maker Boeing are ongoing, Embraer's commercial aviation chief executive said on Wednesday.

Speaking to CNBC at the Singapore Airshow, John Slattery said there is no offer yet, but the company had made submissions to the securities exchange in Brazil about the discussions that are taking place between the two companies and the Brazilian government.

"What I can confirm is Embraer has not received an offer as yet that we can review. Right now, the team is focusing on figuring out if there is a process, a structure that might work," Slattery said.

He added that he hopes to have 'visibility' on the matter in the near to medium term, but declined to reveal the transaction value.

News broke earlier that Boeing was in talks with Embraer — the world's third-largest plane maker — for a 80 to 90 percent stake in a new venture encompassing Embraer's commercial jet business.

The Brazilian government holds a so-called golden share in Embraer, giving it veto power over strategic decisions involving military programs and any change in its controlling interest.

Slattery said that a deal with Boeing now would make Embraer more productive.

"It probably would end up with Embraer being more productive in the market place, and selling more aircraft. We have the ability to broaden our reach,"he said.

Crew members cover windows of Embraer E190-E2 during the 52nd International Paris Air Show at the Le Bourget Airport near Paris, France on June 20, 2017.
Mustafa Yalcin | Anadolu Agency | Getty Images

Slattery called Embraer's E-Jet E2 — its series of medium-range twin-engine jet airliners — a "profit hunter," and wants to deliver that aircraft to more airlines in Asia.

He touted the E2 as being cost efficient, with Embraer bringing down the costs of operating the aircraft, which burns 17 percent less fuel than the company's 190 E1.

Slattery also described Asia as a "big target market," with a third of the 150-seat market located in this region.

"We have 14 operators of E-Jets in the Asian region at the moment. I want to get that to at least 20 operators by 2020. This is a big target market," he said.