Brazilian aircraft manufacturer Embraer has struck a US$2.7-billion deal with Chinese regional airline Hainan Airlines Company to supply 100 planes, half of which will be made in China.

The deal was signed on Wednesday (local time) at the presidential palace in the presence of Brazilian President Luiz Inacio Lula da Silva and China's top legislator, Wu Bangguo, chairman of the Standing Committee of the National People's Congress.

Other deals inked by representatives of the two countries include a plan to build a hydroelectric power station on the Amazon's Madeira River and another for mobile-phone manufacturing in the free-trade zone of the Amazonian city of Manaos.

Embraer said Hainan Airlines Company (HNA), the fourth-largest airline company in China, is buying 50 50-seat ERJ 145s and 50 106-seat Embraer 190s.

The deal marks the first contract involving an ERJ 145 on the Chinese mainland, the Brazilian company said.

Embraer said the ERJ 145s would be produced by the joint venture Harbin Embraer Aircraft Industry (HEAI) in the northeastern Chinese city of Harbin.

The Embraer 190, to be configured for single-class service, will be manufactured at Embraer's plant in Sao Jose dos Campos, in Sao Paulo state.

Deliveries will begin in 2007.

The unit list price of the ERJ 145 is US$21.5 million and that of the Embraer 190 is US$33 million, a company spokesman said. Aircraft sales are often negotiated below the ticket price.

Embraer President and CEO Mauricio Botelho applauded the Brazilian Government's support for the deal with China.

Also signed on Wednesday was an agreement to increase the volume of aircraft manufactured at the Harbin plant.

In an earlier statement, Botelho said: "We are delighted to make public this deal which confirms the correctness of our vision and Embraer's long-term strategy to become an important player in the Chinese market."

The head of the China Aviation Industry Corporation II (AVIC II), Embraer's partner in the HEAI joint venture, underscored the deal's value for the joint venture and China's regional aviation market.

"The awarding of the order of 50 ERJ 145s by HNA Group will further secure the future success of the joint venture which, in turn, will strengthen co-operation between China and Brazil in the aviation sector," said AVIC II President Zhang Hongbiao.

"The deal will push forward the development of both the regional jet-manufacturing business and the regional air-transportation market in China," he added.

Embraer began its joint venture with AVIC II in late 2002, with some 180 employees at the Chinese plant. To date, 12 ERJ-145s have been manufactured there for Chinese airlines, and another six are to be delivered this year and next.

(China Daily September 4, 2006)