Exclusive: Brazil's Rousseff in talks with Boeing for new jet

Reuters News
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Posted: Jul 19, 2012 3:00 PM
Exclusive: Brazil's Rousseff in talks with Boeing for new jet

By Brian Winter

SAO PAULO (Reuters) - Brazil's President Dilma Rousseff is shopping for a new presidential jet and is talking to Boeing about buying one, four sources told Reuters, signaling greater inroads by the U.S. aircraft-maker into one of the world's top emerging markets.

Rousseff is seeking a larger plane more consistent with Brazil's growing economic and geopolitical might and is evaluating the purchase of a Boeing 747 similar to Air Force One, the aircraft used by the president of the United States, the sources said on condition of anonymity.

Rousseff currently uses a much smaller Airbus A319, which her predecessor bought in 2004. The plane is unable to make some direct long-haul flights, having made two stops to refuel on Rousseff's trip to India for a summit in March, the sources said.

"Brazilian presidents are going to be traveling to India and China once a year every year from now on, and we shouldn't have to be making stops like that," one of the sources said.

Another source said that Boeing was Rousseff's only serious contender to supply Brazil with a new presidential jet.

If the purchase goes ahead, it would mark a symbolic victory in Boeing's efforts to gain market share in an economy that is Latin America's biggest and world's sixth-largest. That drive has gained urgency as the company's traditional markets in the United States and Europe show poor growth prospects.

COZY RELATIONSHIPS

Boeing announced a deal this month to supply a new weapons system for light military aircraft made by Brazil's Embraer, which is trying to expand its defense operations. The companies also said in June they would collaborate on the development and marketing of Embraer's KC-390 military transport and refueling jet.

It is possible that a cozier relationship with Brazil's government and its biggest aircraft manufacturer could give Boeing an advantage in another, much bigger deal -- a tender worth at least $5 billion for a new generation of fighter jets for the Brazilian air force.

France's Dassault and Sweden's Saab are the other finalists for that deal. Rousseff is not expected to make a decision on the air force contract until late 2012 or early 2013, officials say.

Jim Proulx, a Boeing spokesman, said via e-mail: "We do not comment in the media on any discussions we might or might not have with potential customers."

The Boeing 747 has four engines instead of two seen on many other new aircraft. It may therefore offer a greater backup in case of an engine problem in mid-flight -- a top priority of Rousseff's after recent safety issues with her current plane, one of the sources said.

In June, Rousseff's Airbus suffered a problem with cabin pressure while she was flying from Rio to Brasilia. While no one was hurt, the plane returned to Rio and Rousseff had to fly to Brasilia aboard a smaller, backup plane, arriving home well after midnight.

Brazil's O Globo newspaper reported on Saturday that Rousseff has a "mortal fear" of turbulence and has occasionally instructed her pilots to alter their flight plans to fly around thunderstorms or other disturbances.

Another big-ticket purchase for a presidential airplane, just eight years after the last one, risks causing a political backlash. President Luiz Inacio Lula da Silva, Rousseff's political mentor, endured intense criticism for overspending when he bought the Airbus in 2004 for a reported $57 million.

However, Brazil's economic and political ambitions have since grown significantly. The country's gross domestic product surpassed Britain's in 2011, and its influence has grown in international forums as well as in other emerging markets, especially countries in Africa.

Even a recent trip to Ethiopia required a refueling stop in West Africa, one of the sources said.

A new plane would ease such inconveniences.

For example, the flying distance between Sao Paulo and New Delhi is roughly 7,800 nautical miles. Airbus' A319 has a range of 3,740 nautical miles, according to the company's website. A new Boeing 747 has a range of 8,000 nautical miles.

A new 747 can seat 467 people in standard airline format, while a standard A319 seats 124.

Airbus is owned by European aerospace group EADS. (Additional reporting by Bill Rigby in New York; Editing by Maureen Bavdek)