* Competitive KC-390 price will make rivals "uncomfortable"
* Embraer says pricing below Lockheed's $90 mln-$120 mln
* Firm orders for cargo plane to start in 1st qtr of 2014
By Brad Haynes
RIO DE JANEIRO, April 9 Brazilian planemaker
Embraer SA is looking to shock rivals with the price
of its KC-390 military transport plane when it starts booking
orders within the next 12 months, according to a senior
Luiz Carlos Aguiar, the head of Embraer's defense unit, made
clear at the LAAD defense show in Rio de Janeiro on Tuesday that
the company was ready to undercut its main competitor, Lockheed
Martin Corp ".
"In terms of price, we're going to make the competition
uncomfortable. They're going to be astonished," he said in an
interview before the event.
The confident tone highlights Embraer's growing ambitions
for the KC-390, which aims to replace aging versions of the
C-130 Hercules made by Lockheed Martin. The Brazilian aircraft
received a vote of confidence last year when Boeing Co
agreed to joint sales.
Aguiar declined to give precise details on the price of
Embraer's new cargo jet at a press conference. He said the price
tag would be "obviously less than" what Lockheed has been
charging recently for the C-130 - a range he estimated between
$90 million and $120 million.
Spokesmen for Lockheed Martin had no immediate comment on
pricing for the Hercules. Lockheed has recently announced a
lower-cost version of its latest Super Hercules and offers a kit
to update older planes at a fraction of the cost.
Embraer also updated its assessment of the potential market
in the military transport segment on Tuesday, estimating global
demand for 728 new cargo planes worth more than $50 billion by
2025, up from the 700 new planes estimated in recent years.
Last month, the Brazilian air force wrapped up the KC-390's
critical design review, finalizing details of its layout and
performance. It also allowed the planemaker to move ahead with
making prototypes and formalizing sales.
Embraer expects to book its first firm orders by the first
quarter of next year, Aguiar said. The company already has
letters of intent for 60 planes from Brazil, Colombia, Portugal,
Argentina, Chile and the Czech Republic.
There are 77 countries that are potential customers for the
KC-390, Aguiar said, adding that Embraer's traditional strength
in Latin America, Africa and South Asia will continue to guide
its commercial strategy on the cargo jet.
Development of the aircraft remains on track, he added, with
the first flight by a prototype expected by the end of next year
and deliveries starting in 2016.