The “Boeing-Embraer” deal will not go through after all, as the former decided to abandon the negotiations abruptly.
According to reports from industry analysts who claim to have inside sources, the deal was in the final stage and right before its final sealing. From its side, Boeing has stated that they worked diligently over the last two years to finalize the transaction with Embraer, but allegedly, the latter wasn’t willing to do what was needed in order to meet the requirements and resolve the outstanding issues that remained on the way.
Embraer blamed Boeing though, accusing them of making false claims and then simply walking away from the venture. Thus, they feel that Boeing is solely and exclusively responsible for the collapse of the partnership deal the two parties have been working hard to build. As the Brazilian aviation firm told the press, Boeing was engaged in a systematic pattern of delay and repeated violations of the master transaction agreement, because they simply didn’t genuinely want to move forward anymore.
The deal would have enabled Boeing to enter the smaller jet market, and it was going to be a huge one in the aviation industry. However, Boeing is in an increasingly worsening financial state, having entered a spiral of downward decline. The COVID-19 pandemic is causing airlines to cancel orders, and air travel, in general, is expected to shrink over the next few years. The grounding of the 737 MAX following the two accidents that revealed problems with its flight control system had a major impact on the economics as well as the reputation of the American aircraft manufacturer. And now, a third blow came, with the Chinese government threatening to boycott Boeing as part of the ongoing trade war, and retract all orders made from Chinese airlines.
The agreement with Embraer presupposed an investment of $4.2 billion to be made by Boeing, and many believe that the historic aircraft developer was no longer in a position to spend this amount of money.