Embraer S.A. Form 6-K Summary
Business Context and Reporting Period
This Form 6-K, filed on January 4, 2018, reports a significant commercial agreement between Embraer S.A. and Widerøe, the largest regional airline in Scandinavia. The filing details the signing of a Flight Hour Pool Program contract for Widerøe's upcoming E-Jets E2 fleet, marking the first such agreement for Embraer's second-generation E-Jets.
Key Financial Metrics
The filing does not provide specific revenue, profit, cash flow, margin, debt, or liquidity figures for the reporting period. The only financial metric disclosed is the potential list price value of the Widerøe order, which is up to USD 873 million if all purchase rights are exercised.
Material Changes and Contract Details
- Contract Type: Flight Hour Pool Program covering more than 300 key rotable components.
- Aircraft Fleet: The agreement supports up to 15 E2 jets, consisting of three firm orders for the E190-E2 and purchase rights for 12 additional E2s.
- Configuration: Aircraft will be configured in a single-class layout with 114 seats.
- Timeline: Widerøe is scheduled to receive its first E190-E2 in April 2018, with revenue service to begin shortly thereafter.
Management Commentary and Outlook
Johann Bordais, President & CEO of Embraer Service & Support, noted that this contract mirrors the first Pool program signed 14 years ago for the original E-Jets, highlighting Widerøe's continued confidence in Embraer's support capabilities. Stein Nilsen, CEO of Widerøe, emphasized that the Pool Program was fundamental to their decision, citing significant savings on repair and inventory carrying costs and guaranteed performance levels. The program aims to minimize upfront investment for airlines while leveraging Embraer's technical expertise.
Investor Verification Points
- Verify the exercise of the 12 purchase rights included in the Widerøe agreement to confirm the full USD 873 million potential value.
- Monitor the April 2018 delivery date for the first E190-E2 to Widerøe to ensure timely entry into revenue service.
- Assess the impact of the Flight Hour Pool Program on Embraer's recurring service revenue streams.
- Confirm the operational performance of the E190-E2 in Widerøe's network as a launch customer reference.