This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 9/5/2019

Aviation
There are three major segments that U.S. suppliers in this industry should focus on: original equipment manufacturers (OEMs), general aviation, and repair & maintenance markets.  A fourth niche, still small but growing rapidly, is the unmanned aerial vehicle (UAV) market.

The Brazilian aerospace industry is the largest and the most important in the Southern Hemisphere.  Brazil  has been one of the top 10 export destinations for U.S. aerospace products over many years. In 2018, U.S. exports of aerospace products to Brazil reached $6.5 billion, an increase of 14.2 percent compared to 2017. U.S. imports of aerospace products from Brazil in 2018 dropped 20 percent compared to the previous year of $2.2 billion - a trade surplus to the United States of $4.2 billion.

Opportunities
OEMs
Embraer is a global company headquartered in Brazil with businesses in commercial and executive aviation, as well as defense and security markets. Founded in 1969, the company became a leading manufacturer of commercial jets with up to 150 seats. In July 2018, Boeing and Embraer signed a Memorandum of Understanding to establish a strategic partnership. Both companies approved the terms of partnership in December 2018, under which a joint venture will be established covering the commercial aircraft and services operations of Embraer. Boeing will hold an 80 percent ownership stake in the new company and Embraer will hold the remaining 20 percent. The two companies also agreed to a joint venture to promote and develop new markets for the multi-mission medium airlift KC-390 manufactured by Embraer. Under the terms of this proposed partnership, Embraer will own a 51 percent stake in the joint venture, with Boeing owning the remaining 49 percent. Embraer and Boeing expect that the deal will obtain final regulatory approval by the end of 2019.

Embraer imports approximately 56 percent  of its components from North America, mostly from the United States. Embraer always welcomes the registration of new and qualified companies in its Supplier’s Portal. Embraer’s selection criteria takes into consideration:  technical solutions, product quality, commercial and aftermarket support, supplier’s performance, expertise and  financial health, and manufacturing capability. It requires certifications e.g. AS9100, EN9100, JISQ9100 and NBR15100. Depending on the type of the product, additional certifications may be required.

The other major OEM is Helibras, the Brazilian subsidiary of Airbus helicopters. Annually, approximately 36 helicopters are produced in its Brazilian plant, serving the military and civil markets. Companies interested in supplying parts or technology to Helibras should send an e-mail to their procurement office.

General Aviation
Brazil has one of the largest general aviation fleets in the world. As of January 2019, the general aviation fleet was composed of 11,231 conventional aircraft, 2,087 helicopters, 1,382 turboprops, 771 jets and 41 amphibious aircraft. Cessna, Neiva, Piper, Embraer and Beechcraft together represent 50 percent of the existing fleet. According to a Brazilian General Aviation Association study, the southeast region concentrates 40 percent  of the fleet, but in 2018 the south and the midwest regions registered the highest growth rate of 5.99 percent and 4.17 percent, respectively. The market has been stagnant over the last three to four years, but experts in the sector view signs of slight recovery over the last few months.  

Repair & Maintenance
According to the Brazilian National Civil Aviation Agency (ANAC), the Brazilian fleet consists of 22,219 aircraft composed of 640 commercial aircraft, 15,914 general/business aircraft, and 5,665 experimental aircraft. Due to the political and economic disruptions going on in the country, demand for new aircraft has slowed down over the last couple of years, but the demand for replacement parts will likely continue growing over the next few years.

The market for aircraft repair and maintenance is estimated at $730 million and has annually expanded 5-6 percent. The relatively strong market for repair and maintenance is driven by more than 40 percent of the general aviation fleet being composed of one or two-engine piston-powered aircraft with more than 30 years of use. The average age of the general aviation fleet is currently 30 years, while the commercial aviation fleet has an average age of six years. To provide repair and maintenance services in Brazil, the company needs a Maintenance Organization Certificate (COM) issued by the ANAC. There are 507 maintenance bases currently in Brazil with a valid COM.

UAVs
While there is no official data on the size of the umanned aerial vehcile market in Brazil, it is estimated to be approximately $80 million. Following a worldwide trend, the market should grow rapidly over the next few years, mainly in the agricultural and inspection segments. In May 2017, the ANAC approved the special regulation for the commercial use of UAV throughout the Brazilian territory. UAV operations in Brazil must follow the ANAC regulations as well as the regulations established by the Brazilian Air Space Control Department (DECEA) and the National Telecommunications Agency (ANATEL).  According to ANAC, there are currently around 2,400 registered drone companies in Brazil, a near 200 percent increase from 2017.

Defense
As an outcome of President Bolsonaro’s visit to Washington in March 2019, the White House officially notified Congress of its intent to  designate Brazil as a Major Non-NATO Ally (MNNA) in May. The MNNA designation is a unilateral U.S. decision that identifies the United States’ top, strategic defense partnerships. Brazil is only the second country to receive MNNA designation in the Western Hemisphere, which reinforces the strong bilateral defense relationship between our two countries. The MNNA will help support the collaboration on the development of defense technologies; privileged access to the U.S. defense industry; and increased joint military exchanges, exercises, and training, as well as special access to military equipment financing.

Opportunities
Brazil's 2019 budget proposal for the defense sector is approximately $30 billion. The National Strategy of Defense (NSD) published in 2008 has been recently revised and continues to be the guide for the medium and long-term strategy for the defense sector in Brazil. The three strategic sectors highlighted in the NSD are: nuclear, cyber, and space, as well as promoting the development and strengthening of the Brazilian defense industry.

Major Brazilian Defense Strategic projects include: the Submarine Development Program and the Navy Nuclear Program coordinated by the Brazilian Navy, Guarani Armored wheeled vehicles, an Integrated Border Monitoring System and Cyber Defense coordinated by the Brazilian Army. as well as the KC-390 aircraft, Grippen AM-X aircraft modernization and Space System Strategic program coordinated by the Brazilian Air Force. The strategic relationship between Brazil and U.S. in the space sector has been rapidly growing in recent years with several foundational agreements signed such as COPOUS-Space Framework Agreement, Space Situational Awareness Agreement, and a Framework Agreement on Peaceful Uses of Outer Space. Most recently, in March 2019, Brazil and the U.S. signed a Technology Safeguards Agreement (TSA). Once ratified by the Brazilian Congress, the TSA will allow the use of U.S. technology in space launches from Brazil, specifically the Alcantara Space Launch Center. TSA will also unlock bilateral commercial cooperation for a range of space-related advanced technologies. According to Brazil’s Strategic Program for Space Systems, priorities for the space sector include development in the following areas: Satellite constellations, Alcantara Center and space operations center.

Safety and Security
In the last decade, public security has become a fundamental problem in Brazil. The industry has gained enormous public visibility leading the federal government to create a public security department to coordinate a portfolio of law enforcement agencies throughout the national territory, including the Federal Police Department, National Prison System and the National Public Security Councils, among others.

Opportunities
The Brazilian National Bank for Economic and Social Development (BNDES) approved the creation of a program to support investments in public security for the acquisition of equipment by states and municipal level police forces. With total expected disbursements of US$30 billion over the next four years, Brazilian officials are seeking to modernize public security agencies through the acquisition of vehicles and equipment such as ballistic vests, holographic sights, stun guns, and others. The GOB is also structuring public-private parternerships (PPPs) to construct and manage prisons.

Web Resources
Aviation
Brazilian Airlines Association (ABEAR)
Brazilian Aviation Institute (IBA)
Defense
Brazilian Defense and Security Industries Association (ABIMDE)
Aerospace Industries Association of Brazil (AIAB)
U.S. Department of Defense/State of Sao Paulo Industry Federation (COMDEFESA/FIESP)
Safety & Security
Brazilian Association of Electronic Security Equipment (ABESE)
Brazilian Association of Security Professionals (ABSEG)
National Federation of Security Companies (FENAVIST)

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.