ETHANOL-FUELED IPANEMA
CERTIFIED BY THE CTA

The Ipanema is the first series production aircraft in the world
coming out of the factory certified for flying with ethanol

São José dos Campos, October 19, 2004 - Indústria Aeronáutica Neiva, a wholly owned Embraer subsidiary, has received type certification for its ethanol-fueled Ipanema crop-dusting aircraft from Brazilian aviation regulating agency Centro Técnico Aeroespacial (CTA). The Ipanema is the first series production aircraft in the world coming out of the factory certified for flying with ethanol.

"An efficient and cheaper source of power, the ethanol alternative will find favor with farmers for lowering their crop-dusting aircraft's operating costs" said Satoshi Yokota, Embraer Executive Vice-President for Development and Industry. "Ethanol is also a more environmentally friendly fuel and Neiva research indicates that it may prolong the engine's life, making it a prospective national market success. "In the medium and long terms, we may benefit from the introduction of the Ipanema in countries that adopt ethanol as a source of energy."

The choice for using ethanol was based on the fact Brazil is a major producer of this type of alcohol, extracted from sugar cane, and automobiles have been using this fuel for more than 20 years. This makes ethanol about three to four times cheaper than aviation gasoline (AvGas).

Additionally, ethanol-powered aircraft engines are cleaner and have lower levels of emission than AvGas because they have no lead in their composition, providing for a more environmentally friendly fuel. Neiva has registered the name "AvAlc" (Aviation Alcohol) in Brazil for use of this new fuel.

The use of an ethanol-powered engine will allow for an increase of about 5 percent in power, thus improving performance in general, namely takeoff run, climb rate, speed and maximum altitude. Initial tests showed that ethanol may also boost from 20 to 80 percent the engine's maintenance cycle.

Conversion of existing engines is not only feasible but also cost effective. Neiva received 69 orders to retrofit customers' AvGas-fueled Ipanemas into ethanol-powered airplanes. This work is expected to begin in January of the next year. Deliveries of the first units of the ethanol version are expected in the first quarter 2005.

The Ipanema is Neiva's best selling aircraft with over 30 years of uninterrupted production and nearly 1.000 units sold . This year, Neiva forecasts 82 Ipanema deliveries compared with 46 in 2003. A dominant force on the domestic Brazilian market, the company's market share is about 80 percent.