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Embraer: Defying Gravity - [Business Breakdowns, EP.158]

Business Breakdowns

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Building Jets and Revenue from Airline Orders

Building jets can take up to a year, with wide bodies taking longer, although they are not frequently built. Airlines place orders years in advance based on their requirements, disconnected from their immediate financial performance. Orders placed now may not be delivered until the late 2020s or even the 2030s. Payments for planes typically start with a small upfront amount and increase as manufacturing progresses, with around 50% being paid at handover. List prices for planes are inflated and airlines usually negotiate around a 50% discount from the list price. The timing, equipment, and circumstances play a significant role in determining the actual discount airlines can get.

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