Embraer’s services and support sales remained steady in the second quarter at $255 million, although the segment’s importance to the Brazilian manufacturer declined ahead of Boeing’s majority takeover of Embraer’s commercial aviation activities.
Earlier this year Embraer received government and shareholder approval to sell an 80% stake in its commercial aviation arm—which encompasses the E-Jet and E2 lines—to Boeing. The deal includes services related to the aircraft which are currently part of the services and support segment.
Services and support sales comprised 18.5% of total Embraer revenue in the second quarter, from 20.4% in the year-before period.
Assets held for sale relating to Embraer’s commercial aircraft production and services amount to $5.73 billion and include $1.4 billion of inventories and $1.1 billion of property plant and equipment.
Boeing has agreed to pay $4.2 billion for its 80% stake, for which it will benefit from several services contracts won by Embraer in the second quarter
These include a long-term flight hour pool program providing repairable component support for Azul’s new fleet of Embraer E2 jets. That deal includes material services engineering and advanced component exchanges from Embraer spare parts facilities in Ft. Lauderdale, Florida.
Azul is awaiting its E2s, with management stating in a recent earnings call that the economics of the new aircraft are so superior that it might be willing to incur higher impairment charges to retire its current-generation Embraer aircraft earlier.
In addition, Switzerland’s Helvetic Airways signed a pool contract to cover four recently added E190 jets, and Aurigny Air Services signed an extension of its current agreement on parts maintenance to support the E195.
Fuji Dream Airlines, confirmed in the second quarter as a previously undisclosed customer for two ERJ175s, also signed an extension of the pool program to cover its fleet of E170s and E175s. This includes exchange and repair management for more than 300 line-replaceable units.