PARIS --- The KC-390 Millennium, the medium-lift twin-engine tactical military transport aircraft launched by Embraer at the turn of the 2010s, has a favorable business outlook. The military transport aircraft market was recently valued at USD 16.07 billion in 2020, and it is expected to register an annual growth rate of 4.88%, reaching USD 21.76 billion by 2026.
The Covid-19 pandemic has given rise to new use cases for transport aircraft. In addition to their traditional roles in strategic and tactical airlift, they have played a crucial role in delivering essential supplies worldwide, such as personal protective equipment, medicine, and ventilators, as well as repatriating citizens stranded overseas. These critical supply flights have highlighted the importance of transport aircraft in emergency response situations.
In light of rising tensions across the globe, many countries are seeking to bolster their aerial combat and support capabilities. This has led to a surge in demand for upgraded or new-generation transport aircraft. Notably, the conflict in Ukraine has prompted NATO countries to transport weapons to European airfields, such as Poland, for onward transmission to Ukraine. This trend has been fueled by a general increase in defense spending, resulting in numerous procurements and upgrade initiatives for transport aircraft in recent years.
Moreover, the worldwide average age of tactical transports is a remarkable 31.2 years, so several nations will soon be looking to recapitalize their fleets.
Embraer's C390: A Competitive Entry in the Billion-Dollar Military Transport Aircraft Market
Undoubtedly, although the billion-dollar military transport aircraft market is promising, Brazilian company Embraer will still face fierce competition from well-established players. Airbus offers its C-295 as well as its much bigger 400M Atlas, while Lockheed Martin provides the venerable Hercules C-130J, the Chinese company Shaanxi Aircraft Corporation proposes the Shaanxi Y9, Italy’s Leonardo promotes the smaller C-27 Spartan, while Ukraine may offer the Antonov An-178, although the latter’s status is unclear.
Nevertheless, Embraer has made a foray into this competitive industry with the development of the KC-390 Millennium. This medium-sized twin-engine military transport aircraft can operate in various mission scenarios, including aerial refueling, cargo and troop transport, search and rescue, humanitarian aid, and firefighting. Indeed, the KC-390 Millennium was designed to fill a gap in the market. It fits neatly between large transports aircraft – a segment where the Arbus A400M alone is in production, and handily surpasses in all aspects the latest variant of Lockheed Martin’s C-130J.
When compared to the C-130J, the KC-390 is 15% faster, carries an 18% heavier cargo, and cost 41% less to purchase. Despite having a 15% lower range than the C-130J, the KC-390 includes aerial refueling as a standard feature (only a few specialized sub-variants of the C-130 feature an aerial refueling capability). It is also reportedly cheaper to buy.
For its part, the four-turboprop engine Airbus 400M has a better range but is slower. Additionally, it is larger and can carry up to 37 tons, whereas the KC-390 can only carry 26 tons.
The KC-390 and Shaanxi Y-9 have almost the same dimension, but the jet propelled KC-390 is much faster (850km/h) and has a longer range than the turboprop Shaanxi Y-9.
Unlike other aircraft in its category, the KC-390 features fly by wire and active sidesticks similar to those used in Airbus airliners, hi-end business jets and advanced jet fighters. In fact, the avionics are virtually the same as those used in the Boeing 787 Dreamliner. This feature facilitates the adaptation of crews from different countries with various backgrounds.
KC-390: Will Embraer succeed in this competitive market?
Brazil has ordered a total of 18 aircraft while Portugal 5, for 827 million euros, which will be produce in an Embraer facility in this country.
"The production in Portugal is important because it already meets NATO's pre-requisites," said, the Brazilian Defense Minister Jose Mucio Monteiro Filho, explaining that manufacturing the aircraft in Brazil to sell in Europe does not meet some NATO requirements. Besides, the certification of the cargo aircraft by the North Atlantic alliance could open doors in the European market and others.
The Netherlands acquired five KC-390s to replace its aged Lockheed Martin C-130Hs, and they will be delivered from 2026.
The Hungarian government signed a contract with Embraer for the acquisition of two KC-390 aircraft, both of which will be delivered by the end of 2024.
Moreover, Embraer is reportedly in talks with the Indian authorities. In this regard, former Embraer CEO Jackson Schneider was saying last year: “India has a very complementary defense industry. As we did in the past, we are open to both countries developing solutions together.”
Other near-term opportunities are being pursued through industrial partnerships. At the LAAD 2023 trade show in Rio de Janeiro, Saab and Embraer S.A. signed of a Memorandum of Understanding (MoU) to deepen their collaboration in several areas. They will collaborate to position the KC-390 aircraft as the preferred solution to meet the Swedish Air Force tactical air transport requirements, and will also evaluate the integration of Saab equipment and systems into it.
Embraer also has teamed up with US-based L3Harris Technologies to offer the KC-390 Agile Tanker concept to the U.S. Air Force, which is analyzing options for a next-generation aerial refueling fleet.
To boost its chances in the Middle East, Embraer earlier signed a memorandum of understanding (MoU) with BAE Systems to help market the aircraft in the region. The UK company has had a strong presence in the Gulf for several years.
Talks are underway with several countries for potential orders. Embraer has earlier secured letters of intent from Austria for five aircraft, Argentina (six), Chile (six), Colombia (twelve), and the Czech Republic (two).
At face value, the KC-390 is competitive, and is seen as the best product in terms of cost-effectiveness and performance, but such deals basically depend on politics.
The C-130 has been a staple of the American aerospace industry since the 1950s, and has been constantly modernized. In the tense environment with Russia waging war on its doorstep, Washington's ability to pressure its minority partners in NATO is not negligible.
That’s why is too soon to say that the KC-390 program will ultimately be a success – before that, Embraer must secure enough orders to achieve profitability. Nevertheless, the Brazilian Group seems to be on the right track. And breaking into the NATO fleet would be a huge milestone to establish itself as a major player in the market.
About the author: Tim Maxwell is a defense and security researcher who wishes to express his views on the evolution of military technologies and their impact on contemporary warfare.
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