Embraer and CAE form training joint venture for Phenom 100 and Phenom 300 aircraft

NBAA, Orlando, FL, October 16, 2006 --

(NYSE: CGT; TSX: CAE) - Embraer and CAE have signed an agreement to form a global training joint venture, which will provide comprehensive pilot and ground crew training to Embraer customers of the Phenom 100 Very Light Jet and Phenom 300 Light Jet aircraft.

The initial training program will be offered at CAE SimuFlite, Dallas, Texas, beginning with the Phenom 100 entry into service in 2008. Plans for the joint venture include expansion to Western Europe and Eastern U.S.

Under the terms of agreement, the joint venture will provide entitlement training and post-entitlement training for pilots, maintenance technicians, and dispatcher personnel. This is CAE’s first training program for the Very Light Jet and Light Jet markets.

“We have a longstanding relationship with CAE and are excited that they will be providing Embraer’s Phenom customers with the high-quality training and personalized service CAE is known for,” said Mauricio Botelho, Embraer’s Chairman, President and CEO. “Our Phenom training program will set the standard for training in the Very Light and Light Jet markets.”

CAE and Embraer will work together to develop all required courseware and provide a team of highly qualified instructors to deliver all ground school and simulator instruction. As part of the training program, CAE will design and manufacture full-flight simulators and combine CAE Simfinity® technology and devices into the comprehensive Phenom training program.

Pilots will have the course content tailored to their specific needs identified in the beginning of the process through tests, interviews and curriculum evaluation. Upon request, a mentor pilot program will be available and offered separately.

“CAE has been supplying integrated training solutions for Embraer aircraft for close to 10 years and has received orders for 11 full-flight simulators of Embraer aircraft over the past three years alone,” said Robert E. Brown, CAE’s President and Chief Executive Officer. “We’re very excited about this new joint venture for the Phenom program, and we look forward to jointly providing customized, high-quality training programs for customers of Embraer’s innovative new Very Light and Light Jet aircraft.”

The Phenom 100 will carry up to eight people and is capable of flying at 41,000 feet. It is expected to enter service in mid-2008 and is priced at US$2.85 million in 2005 economic conditions. The Phenom 300 will accommodate up to nine people and is capable of flying at 45,000 feet. It is expected to enter service in mid-2009 and be priced at US$ 6.65 million in 2005 economic conditions.

Embraer (Empresa Brasileira de Aeronáutica S.A. - NYSE: ERJ; Bovespa: EMBR3) is the world’s leading manufacturer of Commercial jets up to 110 seats with 37 years of experience in designing, developing, manufacturing, selling and providing after sales support to aircraft for the Commercial Aviation, Executive Aviation, and Defense and Government segments. With headquarters in São José dos Campos, State of São Paulo, the Company has offices and customer service bases in the United States, France, Portugal, China and Singapore. Embraer is among Brazil’s leading exporting companies. As of September 30, 2006, Embraer had a total workforce of 18,336 people, and its firm order backlog totaled US$13.3 billion.

More details about Embraer’s executive jets and a complete Phenom mock-up tour calendar are available at www.embraerexecutivejets.com.

CAE (NYSE: CGT; TSX: CAE) is a world leader in providing simulation and modelling technologies, and integrated training services to the civil aviation industry and defence forces around the globe. We design, manufacture and supply simulation equipment and offer training and services. This includes integrated modelling, simulation and training solutions for commercial airlines, business aircraft operators, aircraft manufacturers and military organizations and a global network of training centres for pilots, and in some instances, cabin crew and maintenance workers.

With annual revenues of over C$1 billion, CAE operates in 19 countries around the world. CAE has sold nearly 700 simulators and training devices to airlines, aircraft manufacturers, training centres and defence forces for air and ground purposes in more than 40 countries. We have over 100 full-flight simulators in more than 20 aviation training centres, serving approximately 3,500 airlines, aircraft operators and manufacturers across the globe. CAE licenses its simulation software to various market segments and has a professional services division assisting customers with a wide range of simulation-based needs.

About Embraer’s Phenom 100 and Phenom 300 Jets

The Phenom 100 and the Phenom 300 jets are best-in-class. Premium comfort, outstanding performance and low operating costs are key design drivers for these jets. Both aircraft will offer pilots and passengers the comfort and style unseen in their categories. The relaxing ambience is enhanced by the size of the generous windows and the most ample cabin in their class. Onboard conveniences include a wardrobe or refreshment center, an aft cabin private lavatory with toiletry cabinet, and satellite communications.

The pilot-friendly cockpit and the docile flying qualities of the two new aircraft will enable single-pilot operation. Drawing from Embraer’s design and engineering heritage, the Phenom 100 and the Phenom 300 will be built for high utilization and availability. For added safety and reliability both jets will offer a standard brake-by-wire system with anti-skid capability.

Based upon Garmin’s all-glass, fully-integrated avionics suite, the Prodigy flight deck offers Phenom Jet operators more advantages than any other avionics suite on today’s market. The pilot-friendly cockpit features three interchangeable 12-inch displays – two primary flight displays (PFD) and one multi-function display (MFD). The system integrates all primary flight, navigation, communication, terrain, traffic, weather, engine instrumentation, and crew-alerting system data and presents the composite information in brilliant, sunlight-readable color on three high-definition displays.

The Phenom 100 is powered by two Pratt & Whitney Canada’s PW617F engines with 1,615 pounds of thrust each. Its range with four occupants onboard will be 1,160 nautical miles (2,148 km or 1,335 miles) with NBAA IFR reserves, 35 minutes, and 100 nm alternate; or 1,320 nautical miles (2,445 km or 1,519 miles) with NBAA VFR reserves, 45 minutes. The Phenom 100 is capable of flying at 41,000 feet (12,497 m) with a maximum operating speed of Mach 0.70 and is designed for short field takeoff performance. These characteristics will allow customers to fly nonstop from New York to Miami; from Los Angeles to Vancouver or Denver at a lower cost than competitive aircraft, including turboprops.

The Phenom 100 is priced at US$ 2.85 million in January 2005 economic conditions for FAA certification and is expected to enter service in mid-2008.

The Phenom 300 jet will be configured to accommodate up to nine occupants. Its large baggage capacity of 76 cubic feet (2.15 cubic meters) will conveniently transport passengers’ luggage, golf bags and skis.

The Phenom 300 is powered by two Pratt & Whitney Canada’s PW535E engines with 3,200 pounds of thrust each. Its range with six occupants onboard will be 1,800 nautical miles (3,334 km or 2,071 miles) with NBAA IFR reserves, 35 minutes and 100 nm alternate. The Phenom 300 is capable of flying at 45,000 feet (13,716 meters) with a maximum operating speed of Mach 0.78 and is also designed for short field takeoff performance. These capabilities will permit customers to fly nonstop from New York to Denver or Santo Domingo (Dominican Republic); from Los Angeles to Detroit, Mexico City (Mexico) or Atlanta at a lower cost than competitive aircraft.

The Phenom 300 is expected to enter service in mid-2009 and is priced at US$ 6.65 million, based on January 2005 economic conditions, for FAA certification.

# # #