Boeing announced on Saturday that they have terminated the Master Transaction Agreement that would have created joint ventures with Embraer’s commercial aviation business and develop new markets for the C-390 Millennium medium airlift aircraft.
Today, Boeing has announced the termination of their Master Transaction Agreement (MTA) that was to establish joint ventures with Embraer’s commercial aviation business and develop new markets for the C-390 medium airlift and air mobility aircraft. The MTA’s initial termination date was April 24, 2020 and was subject to extension by either party under certain conditions. As Embraer failed to meet the necessary conditions for extension, Boeing has exercised its rights to terminate the agreement. The partnership had received unconditional approval from all relevant regulatory authorities except for the European Commission. In Saturday’s announcement, Boeing’s President of Embraer Partnership and Group Operations, Marc Allen said,
“Boeing has worked diligently over more than two years to finalize its transaction with Embraer. Over the past several months, we had productive but ultimately unsuccessful negotiations about unsatisfied MTA conditions. We all aimed to resolve those by the initial termination date, but it didn’t happen. It is deeply disappointing, but we have reached a point where continued negotiation within the framework of the MTA is not going to resolve the outstanding issues.”
Boeing and Embraer’s existing Master Teaming Agreement (signed in 2012 and expanded in 2016) to jointly market and support the C-390 Millennium aircraft will remain in place.
Editor’s Note: After Airbus’ acquisition of the Bombardier’s regional C-Series aircraft program (now Airbus A220), the joint-venture between Boeing and Embraer seemed logical. However, with the collapse of the global airline industry due to the global COVID-19 pandemic, the industry is likely to be flooded with used aircraft at depressed prices. Additionally, the contraction of worldwide oil demand has, at least temporarily, diminished the fuel-savings value proposition of next generation aircraft. Therefore, we believe Boeing has made the right decision here as they focus on their core competencies and return the Boeing 737 MAX to service in what will likely be a depressed environment for at least the next few years.
Source: Boeing