Embraer in ‘active’ turboprop partnership talks -exec

Adds details, background

PARIS, Nov 23 (Reuters)Brazil’s Embraer EMBR3.SA is in “active” talks with potential partners to build a new regional turboprop aircraft and could opt for a combination of industrial and financial backing, the head of the company’s commercial division told Reuters.

“We are actively in discussions with (turboprop) partnerships, but I can’t go into more details now,” said Commercial Aviation Chief Executive Arjan Meijer.

“The type of partnership, be it industrial or financial, is wide open. We are looking at all the options, or it could be a combination of the two … We are not ruling anyone out at this point.”

He said the plane would be more fuel-efficient and quieter but cautioned a launch decision was likely to be “beyond 2021” as the airline industry wrestles with a sharp drop in demand.

A new entrant would shake up a profitable niche dominated by Europe’s ATR AIR.PALDOF.MI, which before the crisis forecast demand for 3,020 turboprops worth $80 billion over 20 years.

Turboprops can be more efficient than jets over short trips. But demand has been in the doldrums due to a glut of used planes and heavy reliance on small operators worst hit by COVID-19. ATR delivered just one plane in the first nine months.

With 70-100 seats, Embraer’s turboprop would aim to leapfrog the 78-seat ATR 72-600, and the 90-seat De Havilland Dash 8-400, owned by private equity firm Longview Aviation Capital.

China is also targeting the market with its Xian MA700.

One potential target for co-operation, according to industry sources, is Sweden’s SAABb.ST Saab. It stopped making smaller commuter turboprops in 1999 but has close ties to Embraer through the sale of JAS 39 Gripen fighters to Brazil.

Saab, now a defence and security group with just 12% of sales from civilian customers, had no immediate comment.

(Reporting by Tim Hepher Editing by David Goodman and David Evans)

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