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10:21 AM, January 17, 2019
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Lockheed, Airbus Likely Options if Portugal Abandons Embraer KC-390 Buy
KC-390 transport aircraft (Image: Wikipedia)

Lockheed Martin C130J and Airbus A400 may find their way into Portugal’s plans to acquire military transport aircraft if the nation decides to abandon Embraer KC-390 purchase due to high pricing.

The Chief of Portuguese Air Force General Staff (CEMFA) General Manuel Rolo said in the parliament on Wednesday that the state does not want to see beyond 830 million euros ($945 million). We are in negotiation and the opinion prevails that, if Embraer does not comply with this amount, the State will have to look for other options.

Lockheed Martin C130J and Airbus A400 are the other options Portugal might look at if they cancel the existing deal with Embraer.

According to the general, it is on the table and "this is also the sentiment of the Minister of National Defense [João Gomes Cravinho]," to make "feel to Embraer that other options can be considered if they do not want to enter this level of negotiation for this financial threshold ".

The negotiation team is part of the Portuguese State, the FAP and the National Defense Directorate General, which is "making a very big effort" with the Brazilian company so that it can approach the value that is allocated in the LPM.

"When the negotiation to Embraer was requesting another 120 million euros ($136 million), at this moment the value is at 97 million euros ($110 million)," he said.

Manuel Rolo added that FAP has sought other solutions aimed at reducing the price, such as contracting the acquisition and maintenance of the engines, thus saving on additional commissions charged by Embraer.

There are other components that can be "disaggregated" from the package to be negotiated with Embraer, such as electronic warfare equipment coupled with the aircraft, which can also be purchased directly from manufacturing companies.

Still, "the maximum we can do is bring the deficit to 50 million euros ($57 million)," which "remain unresolved," he said.

For the CDS-PP, the amount requested by Embraer is very expensive and that the Brazilian company should realize that, once the project is completed, Portugal will be the first NATO country to acquire KC-390, constituting itself as a possible gateway for more buyers in the Atlantic Alliance.

On the aircraft, General Manuel Rolo said that the FAP has already flown on the KC-390 and proved that "it is very easy to fly and has increased capabilities", being faster, "up to five hours less in long distance" compared to C -130.

If the purchase is completed, "the training process will be very fast and dynamic," the general said, responding to a PS question.

Asked by the PCP deputy António Filipe about whether there is "a plan B" if the negotiations fail, General Manuel Rolo said that the "B plan that may exist is to look at other aircraft that exist in the market."

"So suddenly, it's the C-130 J and the A400M," he said, noting that the A400M "is an excellent, larger aircraft but has also had a lot of problems consolidating."

Manuel Rolo, however, expressed "hope" that the KC-390 project "is a reality" and said he believed that "the negotiation process will have to lead to an agreement."

António Filipe referred to the ongoing process for North American Boeing to buy 80% of Embraer, considering that the acquisition "is worrisome in what can translate of the strategic orientation of Embraer."

On this point, CEMFA said that "what we have said is that the joint venture would not touch the military sector of Embraer." "It's a difficult negotiation. I do not know if there is any influence here of the new joint venture that is being created with Boeing that may be disturbing the good climate of the initial negotiation, I hope this is not a factor, "Manuel Rolo replied.

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