Embraer to Establish Defense Office in Europe

Embraer's defense division is preparing to expand its presence in Europe with the opening of a new office due to increasing demand for the C-390 Millennium military cargo aircraft. Bosco da Costa Junior, General Manager of the defense unit, indicated in an interview on Sunday that the office will likely be located in Portugal. This is a strategic choice, as Portugal was the first European and NATO country to order the C-390 in 2019 and has already received its initial delivery.

The C-390 Millennium has garnered significant interest from various European countries. Recent acquisitions by the Czech Republic, Austria, the Netherlands, and Sweden reflect this interest. On Saturday, Sweden announced its intention to negotiate for the aircraft to replace its Lockheed Martin (NYSE:LMT) C-130 Hercules fleet. These countries, alongside Portugal and Hungary, are joining the ranks of the aircraft's operators, underscoring the model's strong market presence in the region.

The establishment of the European office aligns with Embraer's goal of becoming a significant defense player on the continent and obtaining necessary NATO security clearances. This office is part of the company's broader strategy to increase its aircraft content in Europe and strengthen its position in the market.

Embraer had previously identified the European Union as a critical market for the C-390, alongside other key regions such as India, Saudi Arabia, and the United States. The company’s focus on NATO countries is part of its strategy to secure more orders and enhance its international presence.

Analysts from BTG Pactual assessed that Europe represents 14% of the C-390's total addressable market, lagging behind the Asia-Pacific's 34% and the Middle East's 32% share. This highlights the strategic importance of the European market for Embraer's defense unit.