Two Chinese companies have signed orders and commitments for a total of up to 60 aircraft from the Embraer E-Jets and E-Jets-E2 families in deals valued at a total of $3.3 billion, during Chinese President Xi Jinping’s state visit to Brazil.
In a July 17 signing ceremony witnessed by the presidents of both nations, Embraer concluded a purchase agreement for the sale of 40 Embraer E-Jets and E-Jets-E2 aircraft to Tianjin Airlines, a subsidiary of the HNA Group, which also owns Hainan Airlines.
And in another signing ceremony in Brazil, also witnessed by the presidents of both nations, the manufacturer inked a sales agreement for up to 20 Embraer 190-E2 aircraft with China’s ICBC Financial Leasing Co., Ltd. (ICBC Leasing).
Embraer also announced both orders at the Farnborough International Airshow 2014, on the show’s fourth day.
The Tianjin Airlines order, which Embraer estimates is valued at $2.1 billion at list prices, is comprised of 20 E-Jets and 20 E-Jets E2, which also makes HNA Group subsidiary Tianjin Airlines the first Chinese airline to order the E-Jets E2 model.
ICBC Leasing’s purchase agreement includes a firm order for 10 Embraer 190-E2s and purchase rights on 10 more. The firm orders for the first 10 aircraft will be included in Embraer’s 2014 third quarter backlog, according to the manufacturer.
Tianjin Airlines’ first current-generation E-Jet (probably an Embraer 190) will be delivered in 2015, and its first E-Jet E2 is scheduled for delivery in 2018.
The Brazilian manufacturer says it will incorporate Tianjin Airlines’ order into Embraer’s official backlog as soon as the company receives the initial payment from the customer.
“Embraer E190s have been the cornerstone of our regional expansion strategy over the past few years and have allowed us to achieve our development objectives,” says Liu Lu, executive chairman and president of Tianjin Airlines.
“We see these additional orders as a continuation of both our short-term and long-term growth plans,” adds Liu. “The 20 new E-Jets E2s will bring us even greater efficiency and flexibility in adding frequencies and expanding markets.”
Embraer values ICBC leasing’s contract at $1.1 billion at list prices if the lessor converts all its purchase rights to firm orders. Deliveries are scheduled to begin in 2018.
“Adding E-Jets E2s to our portfolio will diversify our aircraft resources, strengthen our leadership in the leasing market and support us in expanding the leasing market of regional aviation,” says Cong Lin, CEO of ICBC Leasing. “We are confident that these new jets will bring great benefits to our customers.”
More than 1,000 E-Jets are now in service with 65 airlines in 45 countries. Embraer is planning the first delivery of an E-Jet E2 (an Embraer 190-E2) for the first half of 2018.
Embraer says its partnership with Tianjin Airlines is well established. Tianjin Airlines was the launch customer for the Embraer 190 in China and operates the largest Embraer E-Jets fleet in Asia, with 50 Embraer 190s already in its fleet.
It is also the first carrier in China being appointed as an Authorized Service Center for Embraer aircraft in that country. Recently, the carrier announced it would install the Embraer Ahead-Pro aircraft health monitoring system in all its 50 Embraer 190s, becoming the first airline in China to do so.
HNA Group launched Tianjin Airlines as the first true regional airline in China in 2009. In 2010, the carrier changed its focus from purely regional operations to a combination of mainline and regional services. Its aim is to become a medium to large-size international airline as it pursues a new “regional aviation and global operations” strategy.
Today, Tianjin Airlines operates a fleet of 85 jets, including 12 Airbus A320s and 23 Embraer ERJ-145 regional jets as well as its 50 Embraer 190s. Tianjin Airlines serves some 90 domestic and international cities and carries over 8 million travelers annually.
ICBC Financial Leasing Co., Ltd. was established in 2007 as a wholly-owned subsidiary of the Industrial and Commercial Bank of China, one of the world’s largest banks. ICBC Leasing owns and manages a fleet of over 380 aircraft.
In June 2012, ICBC Leasing ordered 10 Embraer Legacy 650 large executive jets and optioned five more as a follow-on to a memorandum of understanding it signed in April of that year.