This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

Boeing may soon have a 100-seat regional jet to sell around the world. The catch: It’s not really a Boeing — it’s the Embraer E2, which it is close to buying from the Brazilian company.

Fresh on the heels of Airbus closing the acquisition of the Bombardier C Series program, Boeing and Embraer are poised to announce their own deal for the US company to acquire the Brazilian planemaker’s commercial jet operations, according to a report from Bloomberg late Tuesday. That would give Boeing a product in the 100-seat regional airliner market, to compete with Airbus’s newly-acquired C Series.

Sources told Bloomberg that Brazilian President Michel Temer has “endorsed the partnership in principle”. This is a major step towards government approval in Brazil, with the president endorsing the recommendation of his cabinet colleagues.

Embraer is the third-largest maker of commercial airplanes in the world by sales after Boeing and Airbus, but it’s still much smaller than the big two.

“I’m sure the fact that they were suddenly the last small jetmaker in the world was a motivator too,” said Richard Aboulafia, vice president at Teal Group, an aviation consulting firm. “It’s all about keeping your supply chain costs low, and the big players have so much more leverage against their vendors.” 
Aboulafia also noted that Airbus got the Bombardier jet for a symbolic sum of one Canadian dollar. “The main difference is that Bombardier gave up their jet to Airbus for free, and even guaranteed them against further development cost overruns.  By contrast, Boeing has to pay for their part of the Embraer joint venture,” he said in an email to TPG.

Brazil’s Defense minister Joaquim Silva e Luna had told Bloomberg in May that “there was concern about preserving investments in our defense base, so that strategic projects wouldn’t be interrupted. That has been overcome.”

The announcement could come within weeks, as previously speculated. 

Embraer would retain control of its defense manufacturing business, but Boeing and Embraer would jointly operate manufacturing, sales, and marketing of the latter’s commercial plane program and in particular the Embraer E2 program. The E2 competes head-to-head with the Airbus-Bombardier C Series program, the 100+ seat twinjet. The C Series is slightly larger than the E2, but occupies the same market segment for single-aisle airplanes smaller than the Boeing 737 and Airbus A320 families.

Featured image of an Embraer E190-E2 by Emily McNutt/The Points Guy

RELATED VIDEO:

The best beginner points and miles card out there.
Chase Sapphire Preferred® Card

With great travel benefits, 2x points on travel & dining and a 50,000 point sign up bonus, the Chase Sapphire Preferred is a great card for those looking to get into the points and miles game. Here are the top 5 reasons it should be in your wallet, or read our definitive review for more details.

Apply Now
More Things to Know
  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Chase Sapphire Preferred® named a 'Best Travel Credit Card' by MONEY® Magazine, 2016-2017
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR on Purchases
N/A
Regular APR
17.74% - 24.74% Variable
Annual Fee
$0 Intro for the First Year, then $95
Balance Transfer Fee
Either $5 or 5% of the amount of each transfer, whichever is greater.
Recommended Credit
Excellent Credit

Editorial Disclaimer: Opinions expressed here are author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.