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Monday, May 8, 2006

Embraer Introduces Large Bizjet, Executive Care Program

In a follow-on from its popular Embraer 190, Embraer (ERJ) introduced the Lineage 1000, ultra-large business jet, during the European Business Aviation Convention and Exhibitions (EBASE) in Geneva last week. At the same time, it announced the launch of its new Executive Care Program, providing for the "highest level of aircraft availability and utilization, and maintenance cost predictability." The fourth in the company's business jet portfolio, the $40.9-million Lineage 1000 is a 19-seat aircraft with a total cabin volume of 4,085 cubic feet, offering interior customizations, with five distinct cabin areas. It is expected to enter service in mid-2008. "We are competing in the large, ultra- long-range and ultra-large business jet market," said Marco Tulio Pelligrini, vice president-market intelligence, executive jets. "Based on feedback from the market, we see our biggest markets as being in Eastern Europe, Asia and the Middle East but also in the United States and Europe. The customer will be ultra-high-net-worth individuals, charter companies and major corporations." Embraer sees a total market for such aircraft over the next decade of 160 to 180 aircraft, and the company will take a percentage of that. The Lineage 1000 is powered by two GE CF34-10E7 engines with 18,500 pounds of thrust each. It has a range with eight passengers of 4,200 nautical miles. The five cabin areas, depending on customization, could include dining area, bedroom, conference area and lounge. Embraer offers three lavatories, including a stand-up shower. It also has luggage area that is accessible from the cabin and twice the size of those in competing aircraft, according to the company. Embraer is entering a crowded field that includes the $52 million Airbus Corporate Jet, the Boeing Business Jet BBJ1 ($54.5 million) and BBJ2 ($66.5 million), Bombardier's $45 million Global Express and Gulfstream 550. The Embraer 170/190 firm orderbook stands at 452 units, 289 of which are for the 190/195.

The Embraer Executive Care program stems from its Total Legacy Care program and covers scheduled and unscheduled maintenance, OEM parts replacement and maintenance tracking and control. Depending on customers' needs, it also offers two choices between a comprehensive coverage program (labor and parts) or a partial plan covering parts only. For optimum financial planning and budget control, payments are calculated based on the number of hours flown during the month multiplied by a predefined, hourly fee. This allows customers to reduce maintenance costs, better estimate spending and avoid unexpected budgetary surprises. The program also predicts lower rates during the warranty period of the aircraft. Marco Tulio Pelligrini, (+55 12-2937-1000)