Sao Jose dos Campos, Brazil-based Embraer said in a statement that first deliveries of the V2500-E5 engine should begin in 2013. IAE is a multinational consortium formed by Rolls-Royce, United Technologies unit Pratt & Whitney and the Japanese Aero Engine Corp, among others.
"The choice of the first suppliers is key for us to start the project in this new, more advanced phase," Luiz Carlos Aguiar, head of Embraer's defense unit, said in the statement.
Embraer is betting on defense as geopolitical events lead Brazil and other countries to beef up security to protect extensive natural resources. Aguiar, Embraer's former chief financial officer, took over the defense unit in December to boost defense revenue from about 10 percent of total sales.
Chief Executive Frederico Curado told Reuters in a recent interview that he wished to see revenue from defense at about 20 percent in coming years.
Still, the engine announcement comes as investors wait for Curado's decision on whether Embraer plans to build a new family of commercial jets. The decision is key because Embraer lacks a comprehensive offering of planes in the large commercial jet market -- which hinders its ability to win orders from airlines looking to buy aircraft of multiple sizes from one provider.
Deliveries of the first defense cargo airplane, known as the KC-390, are expected by the end of 2015, and analysts have predicted prices of between $80 million and $100 million per aircraft. (Reuters)
