By Luciana Magalhaes and Gabriel Araujo

SAO PAULO (Reuters) – Brazil’s Complete Linhas Aereas, a small cargo and constitution airline, goals to grow to be the primary agency outdoors Asia to purchase plane from China’s state-owned planemaker, which is making an attempt to interrupt into a world passenger jet market dominated by Western producers.

Complete and the Business Plane Company of China (COMAC) have been in talks for months, stated the airline’s controlling associate Paulo Almada, who will go to COMAC in October to debate a possible order of as much as 4 C919 planes.

Brazilian Ports and Airports Minister Silvio Costa Filho stated Complete sought out the federal government to share its intentions, however has not offered any formal plan thus far.

A deal may foster nearer Brazil-China ties within the aviation sector forward of Chinese language President Xi Jinping’s state go to in November. But some business observers have voiced skepticism about Complete’s marketing strategy for the Chinese language jets.

“Even when Complete is getting an incredible deal on the plane, its unproven reliability report and lack of assist community in Brazil make it a really dangerous selection,” PA Consulting Aviation Accomplice Carlos Ozores stated.

Complete’s Almada stated the airline was compelled to look past conventional Western producers akin to Airbus and Boeing (NYSE:) as a result of they had been unable to fulfill demand for brand spanking new planes as they grapple with provide chain constraints.

Brazil’s Embraer has manufacturing slots out there from 2026 however solely affords passenger jets with beneath 150 seats.

“The business is coping with provide shortages, however COMAC instructed us they may ship the plane by subsequent March,” stated Almada, who declined to share paperwork from the negotiation, citing a non-disclosure settlement.

A deal may very well be a “milestone” for Brazil, stated Senator Rogerio Carvalho of the ruling Staff Social gathering, who took half in conferences with Complete. Brazil would anticipate reciprocity, he added, with a rise in Chinese language demand for Embraer jets.

Embraer considers China a key market, however has struggled to seek out new enterprise there because the 2016 closure of a three way partnership in Harbin.

After Brazilian President Luiz Inacio Lula da Silva visited Beijing final yr, Embraer inked a deal to transform 20 of its plane into cargo planes with a associate in Lanzhou, irritating hopes for passenger jet gross sales to a Chinese language airline.

FINANCING, CERTIFICATION

Talks between Complete and COMAC have included the potential of financing from the China Improvement Financial institution for 80% of the full worth in as much as 10 or 12 years, Almada stated, including that every C919 had a listing value of about $90 million.

COMAC and the China Improvement Financial institution didn’t instantly reply to requests for remark.

The present Complete fleet consists of ATR 42-500 turboprops and Boeing 737-400 freighters. The C919 seats as much as 192 folks and competes in an identical class to the Boeing 737 and Airbus A320.

Solely 9 C919s are presently in service since they began industrial operation in Might 2023, all with Chinese language airways.

Exterior China, the one provider to function a COMAC airplane is Indonesian low-cost provider TransNusa, which flies the smaller ARJ21 regional jet, which was licensed a decade in the past. A Brunei-based startup airline, GallopAir, has ordered ARJ21s and C919s.

COMAC this yr has elevated gross sales and manufacturing plans and has been advertising the C919 outdoors China.

Almada stated Complete would fly the C919s on charter-style flights booked by different airways on an Plane, Crew, Upkeep and Insurance coverage (ACMI) foundation, which the business makes use of to fulfill pressing or seasonal demand. Pilots and mechanics could be skilled in China by COMAC, he stated.

A serious hurdle for the C919 is that it lacks certification outdoors of China, significantly benchmark certifications from the U.S. and European Union. The European Union Aviation Security Company (EASA) is presently evaluating the airplane.

Complete would additionally push to get the Chinese language planes licensed in Brazil, Almada stated.

Brazil’s civil aviation company ANAC stated a proper request for certification has not but been filed.