Business Monday

Brazilian aircraft manufacturer Embraer oversees North America operations from Fort Lauderdale

Embraer’s North American chief: Gary Spulak, president of Embraer Aircraft Holding Inc. in Fort Lauderdale, and the Embraer subsidiary covering the U.S. and Canada. He’s standing in front of one of Embraer’s new Phenom executive jets.
Embraer’s North American chief: Gary Spulak, president of Embraer Aircraft Holding Inc. in Fort Lauderdale, and the Embraer subsidiary covering the U.S. and Canada. He’s standing in front of one of Embraer’s new Phenom executive jets. EMBRAER

Embraer, the Brazilian aircraft manufacturer, has made Florida the center of its operations in North America.

Founded in Brazil in 1969 as a government-owned company and privatized in 1994, Embraer designs, manufactures and sells a range of aircraft for commercial airlines and defense, plus executive jets.

The company, whose name in Portuguese is Empresa Brasileira de Aeronáutica S.A. (Brazilian Aeronautics Company) is the world’s largest manufacturer of commercial jets of up to 130 seats, has over 19,000 employees and logged net revenues of $13.6 billion in 2013.

Embraer’s midsize jets are used by regional airlines all over the world.

“Embraer opened its first U.S. sales office in Dania Beach in 1979,” said Gary Spulak, president of Embraer Aircraft Holding Inc. in Fort Lauderdale, the Embraer subsidiary in charge of sales and marketing for commercial aircraft in the U.S. and Canada. “And the company opened its Fort Lauderdale facility in 1981,” said Spulak, who began working for Embraer in 1983.

The Fort Lauderdale complex, built alongside the Fort Lauderdale-Hollywood International Airport, incudes the headquarters offices, marketing staff for commercial aircraft, a maintenance center for executive jets and a warehouse with spare parts and equipment for Embraer’s commercial and executive jets.

The Fort Lauderdale facilities are only one part of Embraer’s large presence in Florida, built to support Embraer’s sales and service initiatives in the key U.S. market.

“The North American market accounts for more than 50 percent of deliveries of all Embraer commercial and executive jets,” said Spulak, who was born in Brooklyn, moved to Florida with his family and attended high school in Hollywood.

“And in the U.S., we have over 1,000 Embraer aircraft flying,” he added.

To gain a stonger foothold in the North American market and provide more service for its planes, Embraer has invested in production and maintenance facilities in Florida and three other states.

Since 2011, Embraer has been building its Phenom executive jets in Melbourne, and recently opened a $24 million engineering and technology center there.

The company is also investing an estimated $48 million in a new Melbourne plant that will make Embraer Legacy business jets.

The Melbourne plants are Embraer’s only production facilities outside Brazil, and more than 60 percent of components used in the planes made in Melbourne come from U.S. suppliers.

In Jacksonville, Embraer is building A-29 Super Tucano turboprop aircraft for the U.S. Air Force. This plane is designed for light attack, close air support, reconnaissance and pilot training,

Embraer also has service and maintenance centers in Arizona, Connecticut and Tennessee.

The company has about 1,500 employees across the U.S. Of these, 727 are in Florida and about 280 in Fort Lauderdale. The new expanions in Melbourne are expected to add hundreds of new jobs.

To date, Embraer has invested around $1 billion in its U.S. operations.

Building its manufacturing and engineering facilities along Florida’s Space Coast has been an advantage for Embraer, Spulak said. “We are able to hire engineers and other specialized personnel who used to work for NASA.”

Embraer was able to carve out a share of the U.S. commercial airline market by successfully offering a line of commuter planes here after the federal government deregulated the airline industry in 1979, said Spulak, who earned a bachelor’s degree in business administration at the University of Miami and an MBA from Barry University.

As a result of deregulation, many large airlines dropped commuter or regional routes that carried fewer passengers and were less profitable. Regional airlines – some of which today are offshoots of the majors – filled the gap, but needed midsize planes to cover their routes.

Embraer was able to compete successfully with Canada’s Bombardier, which makes passenger jets in the same size category, and today has planes flying with American Airlines, United Airlines, Delta Air LinesAir Canada, JetBlueBritish Airways and many others.

As a sign of Embraer’s success, Spulak said the company recently achieved the highest order backlog in its history: $22.1 billion. Most of this is due to orders for its commercial series of Embraer E170 to E195 jets. The E170s are in the 80-seat range, while the E195s can accommodate up to 124 passenger seats, depending on the configuration.

Embraer also sells a line of executive jets, called Phenom, that have been popular among companies for executive travel and wealthy individuals. It also sells a larger series of luxurious business jets called Legacy. The lowest price Embraer executive jet sells new for around $5 million.

One clear sign of Embraer’s strength in the U.S. market was an announcement in September by Republic Airways Holdings Inc., which agreed to buy 50 new Embraer E175, 76-seat commercial jets in a deal worth an estimated $2.1 billion.

Indiana-based Republic owns Chautauqua Airlines, Republic Airlines and Shuttle America, has a fleet of nearly 250 aircraft and operates about 1,300 flights daily to some 110 destinations in the U.S., Canada and the Caribbean.

Republic operates these flights for major airline partners such as American Eagle, Delta Connection, United Express and US Airways Express.

The new Embraer planes, which will be delivered starting in 2015, will be operated for United Airlines under the United Express brand.

Republic, which is a long-standing customer of Embraer, has options to buy even more of the Brazilian company’s planes.

“United was our first E-jet [Embraer E-Jets] customer, and we are excited for the opportunity to further develop our relationship with 50 new E175s,” said Bryan Bedford, president, chairman and CEO of Republic. “We look forward to continuing to provide United with safe, [environmentally] clean and reliable air service.”

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Business: Brazil-based Embraer is a major designer and manufacturer of commercial aircraft, executive jets and military planes with offices, production and maintenance centers in the Americas, Europe and Asia. The company, whose full name is Empresa Brasileira de Aeronáutica S.A., is the largest manufacturer of commercial jets up to 130 seats. Embraer has its North American headquarters and a maintenance center in Fort Lauderdale, assembly plants in Melbourne and Jacksonville and recently set up a new engineering and technology center in Melbourne. It also has maintenance centers in Arizona, Connecticut and Tennessee. The U.S. is a key market for Embraer, where it currently has more than 1,000 aircraft flying.

World headquarters: Sao José dos Campos, Brazil

North American headquarters: Fort Lauderdale (276 SW 34th executive offices, plus North American marketing for commercial aircraft, a maintenance center for executive jets and a warehouse with spare parts for commercial and executive jets.

President: Gary Spulak heads Embraer’s North America subsidiary, Embraer Aircraft Holding, Inc.

Founded: Embraer was founded in Brazil in 1969. Its first U.S. sales office was opened in Dania Beach in 1979 and the Fort Lauderdale center was set up in 1981.

Employees: Embraer has about 280 in Fort Lauderdale, 727 in Florida, 1,500 in the U.S. and over 19,000 worldwide, mostly in Brazil.

Ownership: publicly traded

Revenues: Net revenues for the entire company were $13.6 billion in 2013. Embraer has invested about $1 billion in its U.S. operations to date. It had a record high backlog of orders at the end of third quarter 2014, totaling $22.1 billion.

Commercial jet customers: American Airlines, United Airlines, Delta Air Lines, Air Canada, JetBlue, British Airways plus others.


Source: Embraer