Austria taps Embraer’s C-390 aircraft to replace retiring C-130 fleet

By Peter Frontini

SAO PAULO (Reuters) -Austria on Wednesday selected Embraer’s C-390 Millenium military cargo aircraft to replace its airlifter fleet, as the Brazilian planemaker is wrapping up talks to further beef up its defense order backlog, an executive told Reuters.

Austria is aiming to buy about four of the aircraft for 130 million to 150 million euros ($138.6 million to $160 million) each, and is negotiating with the Netherlands on a potential joint order, Defence Minister Klaudia Tanner told a news conference earlier on Wednesday.

The aircraft would replace Austria’s fleet of Lockheed Martin’s Hercules C-130s, Tanner said, adding the order should be placed in the first half of next year.

The order from Austria would grow Embraer’s order backlog for its defense unit as it aims to reach more countries.

Brazil’s Air Force has ordered 19 C-390 aircraft, while Portugal has ordered five and Hungary has signed off on two.

The Netherlands had previously announced its intention to buy the freighter, also known as KC-390, but has yet to sign a firm order.

Embraer is in the “final stages” of talks with countries around the world looking to place orders for the aircraft, the head of its defense and security unit, Bosco da Costa Junior, said.

“We have high expectations of more operators for this aircraft being announced in the coming months,” he added.

The Czech Republic, which attended a meeting of users of the freighter at an industry event in Brazil earlier this year, could be one of the next customers, the executive said.

“All the elements are in favor of the C-390, in the case of the Czech Republic, but we have to respect their timing,” said Costa Junior.

He said he had every conviction that several other European countries would opt for the model soon as well.

South Korea, India and Sweden are also seen as potential buyers of the aircraft.

Analysts at JPMorgan calculated that, including the prospective orders from Austria and The Netherlands, the aircraft’s potential lifetime sales stand at 35 units, 28 of which are still to be delivered.

Shares in Embraer closed up 2.1% on the Brazilian stock exchange on Wednesday, outperforming the Bovespa stock index, which rose 0.7%.

(Reporting by Francois Murphy in Vienna and Peter Frontini in Sao Paulo; Editing by Andrew Heavens and Bill Berkrot)