Boeing and Embraer are taking on Airbus and Bombardier with a new $4.8 billion joint venture

  • Boeing and Brazilian planemaker Embraer announced on Thursday that they have agreed to create a new joint venture.
  • The new JV will consist of Embraer's commercial aircraft and services division along with Boeing commercial development, production, as well as marketing and lifecycle services operations.
  • Boeing's 80% share of the JV is valued at $3.8 billion.
  • Embraer will retain the remaining 20% of the JV which values its entire commercial aircraft business at $4.75 billion.
  • The deal is expected to close by the end of 2019.

Boeing and Embraer are joining forces. The US aviation giant and the Brazilian plane maker announced on Thursday a preliminary agreement to establish a joint venture.  

The new joint venture will consist of Embraer's commercial aircraft and services divisions along with Boeing's commercial development, production, as well as marketing and lifecycle services operations. 

8 PHOTOS
Secrets airline agents won't tell you
See Gallery
Secrets airline agents won't tell you

Pardon us for staring at the computer -- we're really busy

From opening the door of an incoming flight to coordinating assistance for wheelchair passengers and children traveling alone to preparing the same plane to depart again, gate agents have their hands full. They also deal with last-minute seat assignments, upgrades, customer questions, and crew or maintenance issues. When they seem like they're tapping endlessly on archaic computers for no reason, they're actually accomplishing countless tasks in limited time. Delta Air Lines management once required gate agents to make eye contact with anyone within five feet of the desk every five seconds. Delta agents will tell you just how tough that is. Check out the 13 things airlines don't want you to know.

(Getty)

We can't upgrade you for wearing a tie

The myth that dressing well gives you a better chance at a business class upgrade has been around for some time—and perhaps it was once true. Instead of picking the smartly dressed, though, today's agents follow a priority list, starting with elite frequent fliers. Not following that list, especially when customers can view that information on airline apps, is a big no-no. The only time an agent might upgrade someone for free is if economy class is overbooked and there are no more eligible passengers on the upgrade list.

(Getty)

We can get you a better seat -- if you ask nicely

As eligible passengers are upgraded, more (and often better) seats in economy class will free up. Plus, seats that were previously blocked can now be assigned, so you could ask for an upgrade to a seat with more legroom. Try asking politely about half an hour before departure to see if you can move out of that middle seat at the back of the plane. Don't forget these other 10 etiquette rules for flying on an airplane.

(Getty)

Don't panic if you don't have a seat assignment

This doesn't mean that the flight is overbooked or that you are not confirmed. Because many airlines block seats for families or those who need assistance, there may be times when you won't get a seat assignment right away; other seats might be blocked for frequent flier elite members or still open for sale. If you opt not to pay for a seat in advance—or couldn't pick one at check-in—never fear. Gate agents are working hard to get you an assignment before departure. Keep an eye on the standby list for your name.

(Getty)

Occasionally, we can hold a flight for you

Airline computer systems can alert agents to passengers who might miss a flight because of a late connection. In fact, gate agents are monitoring the record of passengers who might be en route to determine if they should give their seat away to someone else (but only if it is clear the passenger won't make it). They even have a term for late passengers who scurry to the gate: "runners."

If a large group of passengers is delayed by a flight—or if the agents are boarding the last flight of the day—they might hold a plane. But they have to weight a lot of factors: For example, will the crew "time out?" (Pilots and flight attendants can only work a limited number of hours.) On the other hand, they don't want to strand any unaccompanied minors or elite frequent fliers. In other words, you could get lucky if you're running late—but don't count on it.

(Getty)

If you're really late we'll give your seat away

If boarding has finished before you breathlessly charge the gate, there's a good chance the agent will have given away your seat. Agents have to print paperwork listing all of the passengers, plus weight and balance information about the plane, which pilots use for flight calculations. To let a late passenger on the plane, the gate agent would need to redo all that paperwork, delaying the flight even more. You're better off getting there early. If you have time to kill, here's how to never be bored at an airport again.

(Getty)

The computer picks the compensation for bumping -- not the agent

When you're angling for more benefits, the agent can't do much—the computer is calculating how badly the seats are needed and how much of a travel delay it would cause you; then it derives your compensation. Most agents don't have access to airline lounge passes or drink vouchers, so attempts to finagle more goodies most likely will prove futile. However, you could politely request that the agent ask a supervisor if it's possible to offer more. Just don't get your hopes up. Airlines from the European Union—and U.S. carriers operating from it—are subject to strict guidelines on what they can offer passengers if a flight is delayed, canceled, or oversold. However, agents won't always offer extra up front, so it helps if you ask. Here are 12 tricks for stress-free air travel.

(Getty)

Misbehaving can go on your permanent record

Seriously: Although each airline is different, agents can and do make comments on a traveler's record. While the agent may have to search for the info, your nasty behavior or comments in the past can haunt you when you travel—you could even be more likely to get bumped from future flights if you've been really disruptive. Don't miss these other 22 things your flight attendant won't tell you.

(Getty)

HIDE CAPTION
SHOW CAPTION
of
SEE ALL
BACK TO SLIDE

"By forging this strategic partnership, we will be ideally positioned to generate significant value for both companies' customers, employees, and shareholders – and for Brazil and the United States," Boeing CEO Dennis Muilenburg said in a statement. "This important partnership clearly aligns with Boeing's long-term strategy of investing in organic growth and returning value to shareholders, complemented by strategic arrangements that enhance and accelerate our growth plans."

Boeing will hold an 80% stake in the new JV while Embraer, long-considered a shining beacon of Brazilian industrial might, will retain the remaining 20%. The deal values Embraer's commercial aircraft business at $4.75 billion with Boeing's stake in the JV valued at $3.8 billion, the parties said in a statement.

The proposed deal is expected to close by the end of 2019. According to Boeing, the JV is projected to deliver $150 million in annual pre-tax cost saving by its third year.

With the Embraer JV in place, Boeing can now offer a portfolio of commercial aircraft ranging from 70-seat Embraer regional jets to its next-generation 500-seat 777X widebody. 

The deal's announcement comes days after rival Airbus completed its 50.01% take of Canadian aircraft maker- Bombardier's critically acclaimed C-Series program. The JV now gives Boeing's sales team a direct rival to the 100-seat C Series in the form of the brand-new Embraer E190-E2. 

Over the past decade, both Boeing and Airbus abandoned the 100-seat airliner market — instead, deciding to focus on larger, more lucrative jets. This allowed traditional regional jet makers like Bombardier and Embraer to not only thrive but move into the segment vacated by the all-powerful duo. 

NOW WATCH: A Nobel Prize-winning economist says 'non-competes' are keeping wages down for all workers

See Also:

SEE ALSO: I flew on a $10 million Embraer Phenom 300E and I now understand why it's the most popular private jet in the world

FOLLOW US: on Facebook for more car and transportation content!

Read Full Story