Podcast: Embraer, Flexjet Sign $7B Deal For 182 Aircraft

After agreeing a $7 billion deal for 182 Phenom and Praetor jets, Embraer Executive Jets President and CEO Michael Amalfitano and Flexjet CEO Michael J. Silvestro sit down with Aviation Week editors to discuss the order.

Jeremy:                        Hello, and welcome to the BCA Podcast by Aviation Week Network. I'm joined by my colleague Molly McMillin, and we're here to discuss a huge deal between Flexjet and Embraer, a deal that is valued up to $7 billion for the largest firm order for both companies. So, Molly, would you please introduce our guest?

Molly McMillin:             Absolutely, I'd be delighted. First, we have Michael Amalfitano, president and CEO of Embraer Executive Jets with us.

Michael Amalfit...:         Hi, Molly.

Molly McMillin:             And next we have Michael Silvestro, CEO of Flexjet, a fractional ownership company.

Michael Silvest...:          Hello, Molly. Thank you for having us on.

Molly McMillin:             Welcome to you both. So, Flexjet and Embraer is announcing some major news in the way of this significant order, and according to you both, it's not only the largest order that Flexjet has ever placed in its 30-year history, Embraer says it's the largest order to-date for Embraer Executive Jets.

Michael Silvest...:          So, Molly, this is a 20-plus year relationship that has now come to a zenith, if you will. So, we bought our first Embraer Executive Jet aircraft back in 2003, and it moved from Legacy 600s to Phenom 300s to Legacy 450s and 500s to Praetor 500s and 600s. And then, as we find ourselves today in 2025, this reaffirmation of a commitment to not only these aircraft types, but to Embraer in a relationship that has really weathered some pretty significant storms of dotcom crises and financial crisis and the pandemic of 2000. And really have emerged stronger than ever before in our mutual respect and really effective collaboration between the two organizations.

Michael Amalfit...:         I couldn't have said it better. I think the relationship value of the customer base and the relationship value at the company level is second to none in the industry. We're very proud to have the opportunity to look forward and renew our commitment that's been so long-standing with Flexjet, Phenom products as well as the Praetor products from '26 through 2030. And it's very exciting to have the opportunity to continue to showcase our products globally for Flexjet and their customers.

Molly McMillin:             So, why don't you give us a little bit of the details of this order. It's a firm order for 182 aircraft and 30 options. Can you talk about that a little bit, when do the deliveries start and is it over five years or what's the extent?

Michael Silvest...:          Yeah. So, those deliveries start ... We have, of course, a current agreement with Embraer that runs through the end of this year. So, these deliveries start in 2026 and will run through the end of 2030. And as you know the numbers, it's a combination of Phenoms and a lot of Praetor 500s and 600s, not only primarily for our US-based business, but as well as our European operation and potentially our expansion to the Middle East in the upcoming years.

                                   So, it's not only the assets, Molly, which I just shared with you, but in addition, it's a significant commitment by Embraer to support that fleet in terms of service and parts availability around the world.

Michael Amalfit...:         It was a big part of this particular re-up commitment in terms of making sure we had a comprehensive, enhanced service and support network that would allow that growth of reliability, dispatch availability and service commitment for all the customers Flexjet has globally.

Molly McMillin:             I think you mentioned that this will double your fleet, is that correct, over the next five years?

Michael Silvest...:          Today, Molly, Flexjet flies 150 Embraer products, 150 aircraft. So, this will more than double our Embraer fleet over the next five years. And in addition to some of the other aircraft that we have planned for Flexjet's fleet expansion, our fleet will approach 600 aircraft by the time we approach 2031. Doubling our fleet over the next five to six years.

Molly McMillin:             So, you mentioned this is globally, but what's driving all this? Are you seeing that kind of growth or is it expansion into new markets? A combination of both? Or how do you-

Michael Silvest...:          Yeah. I would tell you, look, our business year-over-year is up 12%. Flexjet's book of business compared to pre-pandemic, five years ago versus today, is up over 60%. So, I would categorize it as a combination of current customers flying more and new customers coming in from some macro trends that I would describe as simply younger, larger, longer. Meaning, the generation now that is coming into the ability to fly privately in the 40s, men and women aren't waiting 10 or 15 years to do that. They're all in, in their early to mid-40s. They're starting on bigger airplanes and they're going around the world. So, they're younger, they want bigger planes, and they're traveling longer distances. This order reflects those macro trends that we're seeing.

Michael Amalfit...:         And the products that obviously Embraer brings to market in the segments that Michael referred to, allow that connectivity for performance, technology, comfort, and the service and support that our company at Embraer and Flexjet has known to enjoy and have a reliability to deliver. So, really good to see the growth that's happening in the fractional space also complement Embraer's growth in those same segments.

Molly McMillin:             Michael, I've known you for quite a while here, and you've talked recently about people entering business aviation for the first time since COVID, and I know some of that's kind of tempered in that, but can you talk just a little bit about that of what you're seeing in new business? You probably are both seeing it then.

Michael Amalfit...:         So, Molly, from the OEM perspective, we would say that during the pandemic you saw almost a doubling effect of what would be first-time buyers. Typically, first-time buyers are between 10%, 12%, 15% of any given year's market. And during pandemic, it went up to, in our case, over 38%. That has all come down to its normal levels. And now depending on the segment, whether that be, as Michael said, larger, longer, farther, where you see a lot more stickiness in terms of those first-time buyers coming into the marketplace. And then, back to the more single digit, high single digits segment for the smaller cabin categories.

                                   So, good news is there's stickiness in the first-time buyers and they're staying in once they experience private aviation, whether that be whole ownership or the fractional programs at Flexjet, which is exciting to see. That means that, as Michael said, they're here younger, which means you have them longer in your brands, which is really exciting to see.

Jeremy:                        I would love to know more about how ... So, let me start by saying this. This is a huge order for ... This is just a sheer number of aircraft, and this will also involve a lot of demand for maintenance operations. So, with more planes, there's going to be more engine cycles to worry about. There's going to be more inspections to run. Are your authorized service dealers and your maintainers, your group of MROs and whatnot, are they prepared to up their intake of aircraft to maintain?

Michael Amalfit...:         Yeah, Jeremy, a great question. So, last year, we worked directly with Flexjet and Constant Aviation in anticipation of what we were working on regarding this new order, and that allowed us to double our US footprint of MRO-owned facilities. So, we have Fort Lauderdale, Melbourne, and Mesa, Arizona as the original US footprint. And then, with the transaction we did with Flexjet and Constant, we doubled down on that capability with the addition of Dallas, Cleveland, and Sanford. So, that helped us to prepare for the additional growth that you're referring to, and we're in current discussions in regards to doing the same thing internationally.

Molly McMillin:             To go on from that question, Melbourne, Florida, how does this affect your production lines and the number of people that you employ there? Will this mean an increase of employment or will it just kind of ease on into your production line with what I've got?

Michael Amalfit...:         You can imagine, Molly, these deals just don't happen overnight. Right? So, these things are negotiated, discussed, planned strategically, because we're partners for so many years, we can work on how we enable our capabilities to develop smart asset utilization of our footprint, both in Brazil as well as in Melbourne, to bring these products to marketplace. So, it doesn't require any unique action on the part of our facilities just because of the transaction.

                                   However, recognize that we're very focused on continuing our growth through that efficiency in Melbourne for not only executive aviation, but for commercial and defense and soon to be Eve. So, Melbourne will be the center of excellence for a lot of the growth that you see coming from Embraer in the future. So, we would anticipate continued dedication to the community and the employment and the economic development of the state.

Molly McMillin:             Just one quick question on the rest of your Flexjet fleet, Michael, what's the mix between Gulfstream and Bombardier and Embraer? It sounds like the Embraer product is certainly the core of your fleet, but can you just talk about the overall fleet then?

Michael Silvest...:          Sure. Well, in addition to the Phenom and Praetor 500s and 600s, Flexjet's heritage back before we even owned it was a Bombardier offshoot. So, we still do fly Challenger 3500s. And in the large cabin, the category that Embraer currently is not involved in, we fly Gulfstreams G450s, G650s, and we just took delivery of our first G700. We'll announce that program in more detail in the upcoming months. So, we're very, very excited about that.

                                   So, I think in combination of the manufacturers for us at Flexjet, it's a great mix of aircraft, but we're just so pleased the way in which the marketplace has responded to these Praetor and Phenom products over these many years.

Molly McMillin:             Right. Well, it looks like we're getting close to the end of time. Is there anything else you'd like to say about this order or anything else we didn't get a chance to talk about?

Michael Amalfit...:         I think it's important to always remind the audience about our brands. And so, when you think about Flexjet with the capabilities of having the utmost in excellence in private aviation and Embraer's Executive Jets delivering the ultimate experience in business aviation, you can imagine how our brands fit very well together for not only our companies and shareholders, but for the customers that we serve. And Embraer as a company is always focused on delivering and empowering global aerospace through efficiency and innovation. And those are the things that not only empower our brands today, but will change the ecosystem for the future.

Michael Silvest...:          And one last thing, Molly, above all else, these two organizations of Embraer and Flexjet are absolutely 100% focused on safety, and to make sure that the people that fly in our aircraft that we operate, we deliver them to their missions in a safe way.

Molly McMillin:             Great. Well, we certainly thank you both and we thank you all for listening. Jeremy, I'll turn it over to you.

Jeremy:                        Yeah. Again, like Molly said, thank you both for joining us today, and thank you for listening to the BCA Podcast by Aviation Week Network. This week's episode was produced by Jeremy Kariuki and Guy Ferneyhough. If you enjoyed the show, don't forget to or follow us on your podcast app of choice. And if you'd like to support us, please leave a rating wherever you listen. Thanks again, and we'll see you next time.