What happened

Shares of Embraer (NYSE:ERJ) traded down nearly 5% on Monday afternoon, and were down more than 9% earlier in the session, after the Brazilian aerospace giant lost a key executive to General Electric (NYSE:GE). It's a time of transition for Embraer, which will now have to plot a course forward with a new head of commercial aviation.

So what

On Monday GE named John S. Slattery, CEO of Embraer's commercial aviation division, to head its GE Aviation unit. Slattery had been with Embraer since 2011 and had presided over the launch of the company's E2 small jet.

Slattery was also a champion of Embraer's proposed deal to sell a majority stake in its commercial division to Boeing for $4.2 billion. In April Boeing walked away from that deal, leaving Embraer to either go it alone or find a new partner to help market the E2 internationally.

Embraer E195-E2 on a runway.

Image source: Embraer.

At GE, Slattery will be charged with helping guide the industrial conglomerate's massive aircraft engine-making arm through the COVID-19 pandemic, which has depressed travel demand and has led airlines to cut spending.

Embraer is replacing Slattery with Arjan Meijer, who since early 2017 has been in charge of sales and marketing activity at Embraer as the company's chief commercial officer.

"Arjan has done a fantastic job as the head of sales for Embraer Commercial Aviation," Embraer CEO Francisco Gomes Neto said in a statement. "He has the energy, international experience, and skillset to lead our commercial aviation business at this unique moment."

Now what

Meijer has a challenge ahead of him. That same pandemic-induced slowdown that is weighing on GE Aviation is also impacting jet sales, making it hard for Embraer to get E2 sales off the ground.

The plane's primary competition is the Airbus A220, and Embraer could have really used the support of Boeing's global sales reach to market the E2 against Airbus. The good news is that in the post-pandemic environment, airlines will likely be focused on smaller jets used on domestic routes, which is the E2's core use case, but Embraer still faces turbulence up ahead.