In the midst of the Covid pandemic, in 2020, Embraer leadership pulled together a group of 50 people to develop a strategic plan for the company’s future, called “Fit4Growth.”
“Remember that in 2020 we had to face two different crises—the pandemic that affected all of us and the termination of the deal with Boeing,” said Embraer CEO Francisco Gomes Neto at a pre-Paris Airshow media briefing at its Ogma facility in Lisbon, Portugal. Boeing had agreed to purchase 80 percent of Embraer’s commercial aircraft business for $4.2 billion but backed out of the deal in April 2020. “The [Fit4Growth] plan was created to help us to survive that difficult moment and also to prepare the company for a prosperous future,” he said. The plan's targets include reaching $8 billion in revenue in 2027, up from $4.5 billion in 2022.
Fit4Growth rests on five pillars to help increase revenues and improve profitability: incremental sales for Embraer’s existing products; focusing on efficiency; strategic partnerships; innovation; and environmental, social, and governance initiatives.
“In 2022, we were profitable in all the business units," Neto said. "From 2023 onwards, we see it as a growth period, to capture the full potential [of Embraer].”
The efficiency plan hinges partly on the Ogma subsidiary, of which Embraer owns 65 percent and the Portuguese government the remainder. Ogma has a long history, manufacturing various aerospace products since 1918, and now serves as a key part of Embraer’s growth strategy, both in manufacturing and MRO services.
“We have a huge facility here,” said Neto. Ogma manufactures wings for the C-390 Millennium utility/transport aircraft and composite parts for other programs. Key product lines for Ogma’s 60 MRO customers include military and civil maintenance, while Embraer serves as an authorized service center for Rolls-Royce and Pratt & Whitney engines. A new Ogma facility is nearly ready for advanced repairs and with a new test cell for the Airbus A220’s PW1500G geared turbofan.
“Ogma is a very important subsidiary and will play a very important role in our growth in the future,” said Neto.
“Flight safety…is the most important thing in our company, and quality and of course, enterprise efficiency," said Neto. "We have robust initiatives that we have been working on very hard since 2020.” Those efforts include reducing the production cycle time of new aircraft by 30 percent, a target hampered by supply chain problems. "Even then we see we have seen a lot of improvements by reducing the production cycle time of our aircraft,” he said.
A team focused on maximizing the use of Embraer assets led to the sale of the company’s plant in Évora, Portugal, to Aerrnova Aerospace in 2022. Embraer also closed its MRO facility in Connecticut in 2021. “All of this is to maximize the use of the assets in our organization and with a focus to improve the cash generation,” Neto explained.
Meanwhile, Embraer’s first KC-390 simulator has begun training pilots at the Embraer Academy in São José dos Campos, Brazil. The company will use the level-D simulator, built by Rheinmetall, to train pilots from Brazil, Portugal, and Hungary.
On June 16, Embraer delivered the sixth C-390 and the first in the full operational capability (FOC) configuration to Brazil’s air force (FAB), although all of the FAB’s C-390s can fly aerial refueling missions under the KC-390 designation. The company will upgrade previous C-390s delivered to the FAB to the FOC configuration. The sixth C-390 will operate with the First Troop Transport Group based at Anápolis air force base.