Is Boeing Poised to Dominate Military Transportation?

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Boeing (NYSE:BA) will be in charge of sales for Embraer SA’s (NYSE:ERJ) new KC-390 military transport plane in the United States, United Kingdom, and some Middle Eastern countries.

Embraer, based in San Jose dos Campos, Brazil, believes that the KC-390 will be a viable, cheaper alternative to defense juggernaut Lockheed Martin’s (NYSE:LMT) extremely popular C-130.

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“One of the things we like about this partnership is the value and the performance the KC-390 can bring,” said Chris Raymond, vice president of business development for Boeing defense.

Embraer expects to book initial sales of the KC-390 in the first quarter, with the first flight available in 2015. The company also expects the plane to vie for a market of over 700 planes, according to Bloomberg.

However, knocking Lockheed’s C-130 off its perch atop military transportation will be far from easy. The C-130 has been around since the 1950’s, while undergoing more than 40 modifications in that timeframe, according to United Press International. Older versions of the C-130 have already beaten out competition from Boeing, thwarting the B-52 Stratofortress and KC-135 Stratotanker attempts at commercial success.

The newest version of the C-130 — the C-130J — performs in-flight refueling, air-to-refueling, and tanking. Embraer believes that its KC-390 can do all this, and more.

In the U.S. “there will be a need to look at next generation medium mobility,” Raymond said.

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The KC-390 will comprise parts from companies in Portugal and Brazil, making it a true international model. But any KC-390s sold in the U.S. would comply with rules that most of the work on a Pentagon program to be done in the U.S., said Carlos Aguiar, head of Embraer’s defense business.

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