Boeing Co. and Airbus SE are seeking to buy regional planemakers because their own entry-level jets are too big to be efficient, according to Embraer SA, which is in takeover talks with the U.S. manufacturer.
The Boeing approach and Airbu"™s agreement to take a stake in Bombardier Inc."™s C Series model show they accept that stretching regional planes to accommodate more passengers is a better bet than shrinking their own full-size jetliners, Embraer"™s commercial jets chief, John Slattery, said Tuesday.
Sluggish sales of the smallest versions of the upgraded Boeing 737 and Airbus A320 families bear that out, according to Slattery, who said that making planes smaller while using the same engines leaves them over-powered and too heavy to maximize profitability in the markets they"™re designed to serve.
"The under-performance of the A319neo and the Max 7 is not a result of low market demand but an inability to deliver the efficiency required by the industry," the executive said at the Airline Economics Growth Frontiers conference in Dublin. Airbu"™s move to take control of the C Series "validates the huge opportunitie" in the 100-to-150-seat sector, he added.
"˜Positive"™
Slattery said he supports a deal with Boeing and that the U.S. and Brazilian companies have been close over the years, with "cultural synergie" that would help ease any deeper collaboration.
"As leader of the largest business within Embraer, I am positive toward what a potential outcome could be," he said, while adding that it"™s still unclear what structure a transaction could take…
