Embraer Executive Jets has announced what it calls the largest purchase agreement in its history, securing a deal with Flexjet valued at up to $7 billion. This remarkable transaction encompasses the acquisition of 182 executive jets, with options for 30 additional aircraft, marking a significant milestone for both companies.
The agreement, publicly revealed on Wednesday, includes models such as the Praetor 600, Praetor 500, and Phenom 300E, alongside comprehensive service and support packages. The magnitude of this order not only marks the biggest purchase made by Flexjet over its 30 years of operation but also stands as the largest firm order of executive jets placed with Embraer.
According to Michael Amalfitano, president and CEO of Embraer Executive Jets, this new level of commitment from Flexjet strengthens their strategic partnership, which has flourished over the past two decades. "We are thrilled with Flexjet's renewed commitment through this comprehensive purchase agreement," said Amalfitano. "It enhances our longstanding strategic partnership and ensures our customers will continue to benefit from our market-leading Phenom jets and the Praetor series, which are recognized as the best in their categories."
The partnership between Embraer and Flexjet traces back to 2003, when Flight Options, which later merged with Flexjet, became the first operator to incorporate the Legacy Executive jet. This relationship has only deepened over the years, leading to the inclusion of models like the Phenom 300, which has garnered the title of the world's best-selling light business jet for twelve consecutive years, according to the General Aviation Manufacturing Association (GAMA).
Flexjet’s CEO, Michael Silvestro, expressed enthusiasm about the continuity of their collaboration, stating, "Completing 30 years of Flexjet feels like the right time to extend our longstanding and fruitful relationship with Embraer with this historic firm order. Since 2003, we have taken delivery of over 150 Embraer aircraft. The Praetor 600 has been so well received in Europe we have decided to add it to our North American fleet this year, enhancing our portfolio of Embraer jets on both continents."
Notably, the new order nearly doubles Flexjet's fleet size over the next five years, reinforcing its position as one of the leading players in the fractional ownership market for business jets. The deal reflects not just the volume of aircraft but also the deep-seated trust and collaborative efforts between the two companies.
Since launching its Praetor jets and the Phenom 300E, the partnership has celebrated several industry milestones, such as the delivery of the 100th Phenom 300 jet in 2012 and the 1,000th executive jet from Embraer—a Legacy 500—in 2016. These accomplishments highlight the innovative technological advancements offered by Embraer, aiming to provide superior performance paired with the operational efficiency of mid-sized jets.
The capability of these jets to deliver the performance of larger aircraft with the cost-effectiveness of mid-size jets is represented by their fly-by-wire technology, which has significantly influenced the Flexjet fleet's operational standards.
This deal has had positive repercussions on Embraer’s stock, which saw shares increase nearly 9% shortly after the announcement. Investors are enthusiastic about the growth potential driven by this landmark agreement, indicating strong market sentiment after this significant endorsement of Embraer’s executive jet segment.
Analysts are optimistic about Embraer’s future, projecting continued growth as the company capitalizes on the increasing demand for high-performance executive aircraft. The deal not only adds to the backlog of orders but also enhances revenue visibility and reduces execution risks associated with delivery growth over the coming years.
While specific details about the timing of aircraft deliveries have not been disclosed, the deal signifies both companies’ adaptability to increasing market demands for private aviation services—a sector likely to expand due to rising interest among customers seeking flexible and efficient travel options.
Overall, Embraer is poised to strengthen its competitive edge against industry giants such as Gulfstream and Bombardier, bolstered by the strategic partnership with Flexjet and their shared ambition to redefine the standards of executive aviation.
With ambitious ambitions for 2024 and beyond, the collaboration between Embraer and Flexjet exemplifies how legacy partnerships can evolve to meet contemporary demands, paving the way for innovation and growth within the aviation sector.