Embraer gets order for 50 executive jets (VLJ's)

The VLJ (Very Light Jet) market is picking up steam...

Brazilian aircraft maker Embraer (ERJ.N: Quote, Profile, Research)(EMBR3.SA: Quote, Profile, Research) said on Tuesday that U.S.-based Magnum Jet placed a firm order for 50 executive jets with the option to buy 50 more in a deal that could reach $275 million if all options are converted.

Magnum Jet, which is based in Houston, Texas, agreed to buy 50 Phenom 100s, a small, luxurious business jet that Embraer is currently developing. At list price, the firm order would total $137.5 million.

The contract also includes 50 options that can be converted into either Phenom 100s or Phenom 300s, a slightly larger version of the same jet. The Phenom 100 is expected to be ready to fly in mid-2008, with deliveries to Magnum Jet beginning in early 2009.

The deal was announced just one week after Embraer, the world's fourth-largest commercial jet maker, inked a $2.7 billion contract with airline HNA Group for 100 passenger jets -- its biggest order to date in China.

Embraer, which gets about 70 percent of its revenue from commercial aircraft, has been seeking to diversify by branching out into the executive jet market -- a crowded market that it hopes to compete in by offering more affordable planes that are cheaper to operate.

In addition to the Phenom, Embraer is also developing a new ultra-large business jet called the Lineage 1000, which is designed to seat up to 19 passengers.

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