By Gabriel Araujo
SAO PAULO, May 4 (Reuters) - Brazil's Embraer expects new defense aircraft deals in the Middle East, including government-to-government procurements, after a landmark order for C-390 military planes from the United Arab Emirates, the head of its defense unit said on Monday.
The company's defense chief Bosco da Costa Junior told Reuters the deal for up to 20 C-390 military cargo aircraft with the UAE, the twelfth country that has selected the jet, positions the Brazilian planemaker
for more sales to its allies.
"The Middle East is a strategic region for us," he said, adding Embraer has been promoting the C-390 and the Super Tucano light attack aircraft in the region.
Costa Junior highlighted what he called a "differentiated" contract with the UAE for 10 C-390 jets and 10 options - the first time the model has been selected by a Middle East buyer.
"I don't think those 10 options were put into the contract simply for the sake of having options," he said. "I believe we will see here government-to-government mechanisms ... with one nation facilitating the entry of other nations into the C-390 operators' club," he added, declining to name potential buyers.
Government-to-government procurements had been key to C-390 sales in Europe, with Sweden joining an agreement led by the Netherlands and Portugal securing purchase options for orders by other European, NATO countries.
Embraer's shares rose 2.5% following the UAE deal, outperforming Brazil's benchmark Ibovespa index, which fell 0.9%. Itau BBA analysts estimated the firm order to be worth $1 billion.
AGING FLEETS
In the Middle East, Embraer had campaigned to replace an aging Saudi fleet of Lockheed Martin's C-130, but CEO Francisco Gomes Neto told Reuters earlier this year that prospects had dimmed for an order from that country.
The UAE currently operates both the C-130 and Boeing's C-17.
Costa Junior said that ongoing global conflicts were not directly accelerating sales, but sharpening governments' focus on operating costs and asset availability, driving fleet replacement decisions.
Embraer estimates global demand for 400 to 480 aircraft in the military cargo segment over the next 20 years, largely to replace aging fleets, with around 260 aircraft worldwide nearing or exceeding 45 years of service.
"These aircraft will need to be replaced," he said, adding the C-390 was ready to operate in any region.
(Reporting by Gabriel Araujo; Editing by Sanjeev Miglani)
