On the morning of August 9, Embraer sent its investors a note highlighting that the Brazilian Air Force decided to cut the current contract with the manufacturer to 21 KC-390 Millennium, from the 22 agreed in the last reduction and from the 28 it had agreed in the original contract.
«Embraer S.A., in compliance with the provisions of Securities and Exchange Commission Resolution No. 44, dated August 23, 2021, informs its shareholders and the market that it has taken cognizance of the Federal Government’s decision to delete an aircraft under Contracts 002/DCTA-COPAC/2014 and 10/DCTA-COPAC/2014, entered into in 2014 between the Federal Government, Embraer and one of its subsidiaries.
The Company will evaluate the appropriateness of the union’s decision. Where appropriate, the Company will evaluate the applicable conditions to ensure the economic and financial rebalancing of the Contracts, as well as the effects of the possible removal of the aircraft on its business and results.»
In May 2021, the Brazilian government stated an initial intention to reduce contracted aircraft to 18, although it later raised that number to 22. This further reduction complicates the tactical transport landscape, even with the Dutch forces’ recent replacement competition win over the Lockheed Martin C-130J Super Hercules.
