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Embraer (ERJ), NetJets Ink $1.2B Deal for 100 Phenom 300E Jets

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Embraer S.A. ERJ recently inked a deal with NetJets, Inc. for delivering up to 100 additional of its Phenom 300E aircraft. Valued at more than $1.2 billion, this deal includes a comprehensive services agreement.

Per the terms of the deal, Embraer will start delivering the Phenom 300E to NetJets in the second quarter of 2023, in both the United States and Europe.

The latest agreement reflects an enhancement in partnership between Embraer and NetJets, with the latter having signed a purchase agreement with Embraer in 2010 for 50 Phenom 300 executive jets plus up to 75 options.

Phenom 300E Specifics

The Embraer Phenom 300E, one of the most popular small private jet options, is the world’s fastest and longest-ranged single-pilot aircraft. Its exclusive Oval Lite cabin provides the most head and legroom of any light jet.

The Phenom 300E is equipped with remarkably powerful yet efficient engines, which offer a reduced noise footprint as well as better fuel burn and fewer emissions.

Embraer’s Growth Prospects

The global aviation industry probably bore the most significant brunt of the COVID-19 outbreak, which resulted in severe air travel restrictions on domestic as well as international flights across countries last year. This resulted in the grounding of aircraft fleets and a sudden dip in aircraft orders and deliveries in 2020, with the business jet section suffering immensely.

However, with the rapid rollout of vaccines in the past few months, the situation has improved in the aerospace sector and so has the outlook. In fact, with certain relaxations across regions, business jet operators and service providers have been lately witnessing sluggish demand for charter services.

It is imperative to mention that the business jet market size is expected to reach $38 billion by 2030 from $18.8 billion in 2020, at a CAGR of 7.3%, as projected by the Market and Markets research firm.

Such impressive growth projections should bode well for a business jet pioneer like Embraer.

Other Stocks to Benefit

Considering the aforementioned growth prospects of the business jet market, other prominent business jet makers like Textron TXT and General Dynamics GD are also expected to benefit.

Notably, Textron is well known for its Cessna brand of executive jets along with the Beechcraft family of jets that offers business aviation as well as other mission specific aircraft. General Dynamics’ Gulfstream Aerospace unit offers offer a comprehensive fleet of executive aircraft, comprising the G280, the G550, the G500, the G600, the G650, the G650ER and the G700.

The growth prospects of the business jet market are also expected to boost revenues of companies like Honeywell HON, with the business aviation industry relying on its state-of-the-art technology, products and services for safer and more efficient flight operations. For instance, its Primus Elite Synthetic Vision adds new levels of sophistication and safety enhancements to a jet’s cockpit while its IntuVue RDR-7000 Weather Radar System gives business aviation pilots clear and timely information.


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