Embraer once again predicted that the arbitration it is filing against Boeing after the abrupt end of the joint venture between the two companies will have a quick outcome.
In its presentation of its financial results for the second quarter, the Brazilian company stated that it believes that the decision on the matter will occur by September, although it notes that it cannot guarantee this.
In fact, the planemaker has already had one frustrated forecast after saying that it expected a resolution by the end of June.
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“Embraer has been pursuing all appropriate remedies against Boeing for damages suffered by Embraer due to wrongful termination and violation of the Master Transaction Agreement and Contribution Agreement by Boeing, including by means of arbitration proceedings initiated by both sides in connection with the termination of the Master Transaction Agreement and/or the Contribution Agreement by Boeing”, said the company.
Boeing Brasil Commercial
Boeing and Embraer became closer soon after Airbus acquired Bombardier’s C Series program, which strengthened its portfolio with modern jets with 100 or more seats.
To respond to its rival, the US manufacturer proposed to take over 80% of Embraer’s commercial aviation division for a value of US$4.2 billion.
The agreement was signed in July 2018 and would create ‘Boeing Brasil Commercial’ as soon as the definitive sales contract was signed in April 2020.
In the meantime, Embraer began to separate the commercial aircraft business from the group and even created a provisional company for this purpose, awaiting the signing with Boeing.
Credibility crisis
The US planemaker, on the other hand, entered a spiral of problems as soon as a Lion Air 737 MAX 8 crashed into the sea in October 2018.
The following year, it was learned that the aircraft had a serious problem with the MCAS system, which was supposed to help pilots compensate for the 737 MAX’s nose-up behavior, resulting from design changes to accommodate larger engines.
A second accident involving an Ethiopian Airlines jet in March 2019 precipitated the grounding of all aircraft and the beginning of a credibility crisis that continues to this day.
The following year, amid the onset of the Covid-19 pandemic, Boeing alleged that Embraer had failed to meet the requirements of the joint venture and withdrew from the agreement, leaving the then partnership with huge losses assumed to pave the way for the acquisition.
Weeks after the end of the joint venture, Boeing and Embraer went to court to seek compensation, which has now lasted more than four years.
