Embraer (ERJ) delivered 27 regional jets in the first quarter of 2006 and capped off the quarter with the opening of a new, 78,000-square-foot maintenance facility in Nashville. The 27 new aircraft went to airline, corporate and military/government customers, part of the 145 jets expected to be delivered this year.

The new maintenance facility, part of Embraer's wholly-owned subsidiary Embraer Aircraft Maintenance Services (EAMS), expects to employ 165 when it reaches maturity and expands its maintenance capacity beyond the original facility of 125,000 square feet. The new space consists of production shops, support offices, and a three-bay hangar capable of accommodating three EMBRAER 195s - the largest in the E-Jets family - simultaneously. The facilities will also be used to maintain Embraer's growing fleet of Legacy 600 aircraft, and other narrowbody aircraft. Operations in the new EAMS hangar are expected to begin next month and will extend the services it offers for turboprops and regional jets

It is also part of its strategy to tap into the growing maintenance, repair and overhaul (MRO) business and will be open to servicing other aircraft types beyond the Embraer line. When it acquired the Nashville operation in 2002 revenues were $16 million annually. At the opening of the new facility Embraer CEO Maurice Botelho said he expects EAMS revenues to top $30 million. The project was completed through a partnership with the Metropolitan Nashville Airport Authority and the state of Tennessee.

Embraer's delivery projections for this year have not been impacted by the 20-aircraft ERJ 140 order cancelled by Midwest Express during the quarter. Its current backlog of firm orders totals $10.4 billion. Calyon Analyst Ray Niedl noted that, with options, its orderbook is valued at $24 billion or six times 2005 revenue. As of December 31, 2005, Embraer reported cash and equivalents of $1,913.5 million compared to $1,798 million in the September quarter when deliveries began of the E190. Its net cash position, said Niedl, was at $357 million compared to $97 million in the September quarter and $22.1 million in the year-ago period.

Ray Niedl, 212-261-4057 ray.niedl@us.calyon.com, Maurice Botelho, (+55 12) 3927 1311