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Embraer Launches Praetor 500 & 600 Jets, Eyes Bigger Market

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Brazilian aerospace conglomerate, Embraer S.A. (ERJ - Free Report) recently unveiled its new Praetor 500 midsize and Praetor 600 super-midsize business jets. Currently under development, the Praetor 600 is expected to commence operations in second-quarter 2019, followed by the Praetor 500 in the third quarter.

A Brief Note on Praetor Jets

Praetor 600 will be the farthest-flying super-midsize business jet, allowing nonstop flights between London and New York. On the other hand, Praetor 500 will be the fastest midsize aircraft, capable of reaching Europe from the west coast of the United States with a single stop.  It will lead the midsize class with a continental range of 3,250 nautical miles. With the integration of multiple advanced technologies, including a full fly-by-wire technology and active turbulence reduction, passengers will also be complemented by a best-in-class 5,800-foot cabin altitude for ultimate passenger comfort.

The Praetor jets will also feature the state-of-the-art Rockwell Collins’ ProLine Fusion flight deck with the industry-first vertical weather display, air-traffic-control-like situational awareness with ADSB-IN, and predictive wind shear radar capability.

Our View

Embraer, enjoys a strong order growth for its commercial aircraft across the globe. During the third quarter of 2018, the company successfully secured a $1.1-billion contract from United Airlines for delivering 25 of its E175 jets. Going forward, due to its vast expertise in the Aerospace Sector, the company strives to achieve more such sizeable contracts. These massive orders should boost its top line, in the days to come.

Moreover, in July, aerospace giant Boeing (BA - Free Report) and Embraer entered into a strategic joint venture (JV) worth $4.75 billion, which is expected to improve Embraer’s cash position by approximately $1 billion on the deal’s closure,
thereby creating more investment opportunities in its upcoming aviation projects.

Per Boeing’s latest Commercial Market Outlook (CMO), the world will need 42,730 new planes, worth $6.35 trillion, between 2018 and 2037. Such solid jet demand growth for aircraft will bolster the aviation services market,
which, in turn, would benefit major commercial jet makers like Embraer, General Dynamics (GD - Free Report) and Textron (TXT - Free Report) .

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