Tracey Cheek posted an articleBoeing, Embraer Agree To Terms on Commercial JV, Propose Second JV for KC-390 see more
Boeing and Embraer have approved the terms of a strategic partnership that will give Boeing an 80 percent stake in Embraer’s commercial aircraft and services operations through a joint venture, the companies announced through a joint press release today.
Boeing said it will pay $4.2 billion, up from $3.8 billion, for the ownership stake in the JV, which still requires approval by the Brazilian government.
“We are confident that this partnership will deliver great value to Brazil and the Brazilian aerospace industry as a whole,” said Embraer president and chief executive officer Paulo Cesar de Souza e Silva. “This alliance will strengthen both companies in the global market and is aligned with our long-term sustainable growth strategy.”
Under the agreement that values the JV at $5.25 billion—up from $4.75 billion when the JV was proposed through a memorandum of understanding on July 5, according to analysts at Bank of America Merrill Lynch—the JV will be led by management based in Brazil, including a president and chief executive officer. Boeing said it will have operational and management control of the “new company” that will report to Boeing chairman and CEO Dennis Muilenburg.
“Boeing and Embraer know each other well through more than two decades of collaboration, and the respect we have for each other and the value we see in this partnership has only increased since we announced our joint efforts earlier this year,” Muilenburg said.
Embraer will have consent rights for certain strategic decisions such as transferring operations from Brazil, the companies said.
Boeing said the proposed JV is expected to be neutral to its earnings per share in 2020 but accretive thereafter.
Embraer and Boeing also said they have agreed to terms of another JV to promote and develop new markets for Embraer’s KC-390, a multi-mission, medium-lift airplane. Terms of that JV call for 51 percent ownership by Embraer and 49 percent by Boeing.
The companies hope to close the commercial JV transaction by the end of 2019, which awaits approval from Brazil’s government, Embraer’s board of directors as well as shareholders and regulators.
The announcement comes days after a Brazilian appeals court overturned a December 5 ruling by a federal judge in São Paulo granting an injunction to block Embraer’s board of directors from approving the proposed deal.
This article was originally published on AINonline on December 17, 2018 by Jerry Siebenmark.
Tracey Cheek posted an articleThe Realities of the Pilot Shortage see more
NAFA member, Rene Banglesdorf, CEO of Charlie Bravo Aviation, discusses how good pilots are hard to find and how the realities of the pilot shortage are starting to affect the aviation industry.
Gone are the days when aviation departments sort through a huge stack of resumes for pilots – though a few still do. Nowadays, good pilots seem to be hard to find. And the realities of a pilot shortage are finally starting to affect the aviation industry.
High pilot training costs, several years of earlier hiring freezes in top markets, and the threat of technology replacing pilots in the not-too-distant future has deterred the next generation of talent.
By my math, the number of pilots retiring exceeds the number of new entrants by more than 100-percent – with an increasing demand from commercial, cargo and private operators. To us that signals a critical shortage – and if the airlines are feeling it sharply, general aviation will be too.
Already we hear about American or Canadian pilots being recruited to the Middle East and Asia at salaries double or greater the averages in North America. Larger carriers are offering signing bonuses, 20-percent-plus pay increases and better benefits to attract and retain experienced pilots.
Boeing’s job forecast
In its most recent jobs forecast, Boeing indicated an unprecedented 20-year demand for pilots at 790,000 – double the current workforce. And according to their report, 80,000 pilots in the US alone will age out in that same timeframe.
“Despite strong global air traffic growth, the aviation industry continues to face a pilot labour supply challenge, raising concern about the existence of a global pilot shortage in the near-term,” said Keith Cooper, Vice President of Training & Professional Services, Boeing Global Services. “An emphasis on developing the next generation of pilots is key to help mitigate this. With a network of training campuses and relationships with flight schools around the globe, Boeing partners with customers, governments and educational institutions to help ensure the market is ready to meet this significant pilot demand.”
To this end, Boeing touts its Pilot Development Program – an accelerated training program that guides future pilots from early stage ab-initio training through type rating as a first officer – to help operators meet their growing pilot needs.
That’s great for companies or people operating Boeing’s aircraft, but it may not factor down into providing a pipeline of pilots for general aviation, especially piston or turboprop operators.
The competition is on
Regional airlines have doubled starting salaries and bonuses in recent years, which heralds stiff competition for lower-time pilots, as regional airlines typically serve as time and tenure builders for younger pilots.
Private aviation flight departments are getting more competitive as well. Recent news of airline compensation increases has encouraged some firms to bump salaries by 30 or 50 per cent to avoid pilot turnover.
The pilot shortage that’s affecting commercial and private aviation is affecting the military, as well, as fighter pilots are leaving the military in droves for cushier, better-paying jobs in commercial and private aviation.
“Despite strong global air traffic growth, the aviation industry continues to face a pilot labour supply challenge, raising concern about the existence of a global pilot shortage in the near-term.” ~Keith Cooper
In order to compete with the airlines and private flight departments, the military is taking steps to improve benefits to their pilots in addition to increasing pay, including more cockpit time, increased flexibility in assignments, more career options, and shorter deployments.
Many flight departments and airlines are doing the same.
While I’m all for more competition among operators – especially with my daughter in expensive flight training – the bigger question here is how can we make training less cumbersome or costly?
Flight schools, like Flight Safety International, where my daughter is in training for her airline transport pilot (ATP) license, are competing for certified flight instructors to keep up with demand for training. When there aren’t enough instructors, training is delayed, pilot trainees are discouraged, and expenses increase – all deterrents to increasing the numbers of pilots entering the workforce.
According to a 2017 study conducted by CAE, a civil aviation training provider, the global airline industry will require 255,000 new pilots in order to meet the demand of airline growth and pilot attrition over the next 10 years. “The largest requirement will come from the Asia-Pacific region which alone will need 90,000 new pilots, followed by the Americas which will need 85,000,” said Kinda Sarrage, Regional Sales Manager for the Middle East, Northern Africa and South Asia.
“The largest requirement will come from the Asia-Pacific region which alone will need 90,000 new pilots, followed by the Americas which will need 85,000.” ~Kinda Sarrage
“Many regions have been experiencing a higher than usual turnover of experienced pilots or captains leaving them for the Asian carriers as they offer more competitive packages, tax benefits, and flexible work rotations. To compensate for this loss, airlines should establish second officer recruitment schemes. Though some airlines have begun implementing programs to attract lower hour pilots, it is at a much slower rate than that which is required. If airlines established such programs several years ago, they would have a steady pipeline of first officers coming through that would be upgradable to captains today. The reality is that the pool of available captains is shrinking, and this is becoming apparent as airlines struggle to recruit and train pilots to meet their demands,” Sarrage said.
In the US, Senators James Inhofe and Tammy Duckworth are co-sponsoring bipartisan legislation aimed at helping the general aviation community.
The Securing and Revitalizing Aviation (SARA) Act of 2018 (S.3270) calls for the creation of an Aircraft Pilot Education Program that would allow high school students to get a head start on their flying careers by taking aviation-related courses for credit, according to a press release from the National Business Aircraft Association (NBAA).
The bill also includes reforms to existing Federal Aviation Administration (FAA) regulations to ease the shortage of qualified designated pilot examiners (DPE) needed for initial and recurrent pilot training.
Additional provisions would enhance existing due process protections for pilots; extend limited liability coverage for FAA designees performing agency duties, but who are not covered under immunities for government employees, as well as for pilots performing volunteer missions; and grant the National Transportation Safety Board (NTSB) the authority to review denials of airman certificates by the FAA.
The Aircraft Owners and Pilots Association (AOPA) has worked diligently for years for medical requirements reform, facilitating the renewal of licenses for more than 5,000 “rusty” pilots.
The AOPA You Can Fly High School Initiative ninth-grade STEM curriculum was tested in 29 high schools during the 2017-2018 school year. It has proved popular with teachers and students alike because it engages youth with hands-on activities and exposes them to the world of aviation and potential careers. The program, created in partnership with educators, curriculum developers, and aviation experts, offers four-year study options in aviation career pathways and is aligned with rigorous math and science educational standards already in use.
Each of us should be working toward attracting as many pilots and mechanics as possible to aviation –and then working to keep them here!
General aviation flight departments are beginning to awaken to a reality that pilot salaries, bonuses and flexibility are changing. What are you doing to adapt?
Rene Banglesdorf is the CEO of Charlie Bravo Aviation, a worldwide aircraft brokerage based in Austin, Texas. She is an author, speaker and podcast host.
This article was originally published in Altitudes Magazine on October 14, 2018.