Posted on: 13 February 2014 by Mark Howells
Air Costa has placed a firm order for 50 Embraer E-Jets E2 family aircraft (25 E190-E2s and 25 E195-E2s) with purchase rights for a further 50 (similarly split), making the carrier the first airline customer for the larger pair of the E2 family.
The deal takes the E-Jets E2 orderbook to 200 firm and 200 options/purchase rights since the programme’s launch during the Paris Air Show in June 2013.
Air Costa, which currently flies four E-Jets, two E170s and two E190s, will take delivery of the E190-E2 in 2018. The E195-E2 is scheduled to enter service in 2019.
Air Costa, which is part of LEPL Projects, has been operating since October 2013, with flights to six cities. Ramesh Lingamaneni, chairman of Air Costa and executive director of LEPL Projects, reported that the average load factor over last three months has been around 72%.
Giving a background to LEPL’s work, its VP corporate finance, Vivek Choudhary, explained that the company concentrates on developing infrastructure in Tier 2 and Tier 3 cities in India. “Approximately 70% of India’s population lives in the non-metro cities. That’s where we believe we should focus,” he emphasised. “And we expect 15% GDP growth for some time and a growing middle-class. The Indian Government has recognised this and thus the importance of the smaller cities.”
Choudhary then reported that in order to meet this growth until its E190/195-E2s arrive, Air Costa will induct more E190s on lease. “We’ve just received two E190s and from July we’ll be taking an aircraft every quarter until the E2s start to be delivered,” he confirmed.
Asked if all the E2s would be on the company’s books or if there may be some sale-and-leaseback deals, Chaudhary acknowledged the possibility of the latter. “We know a lot of lessors are interested in speaking with us,” he said.
On the requirement for interlining and feed traffic, Chaudhary observed that the company had done its market study, which had led it to focus on point-to-point traffic. “We’ve completed our calculations and our load performance speaks for itself,” he stated.
Embraer’s team was asked how much of a breakthrough the deal is for its prospects throughout the Asia-Pacific. “We intend to make a difference in the region. We’ve seen with this order that the Indian market is so strong. But so too are places such as Indonesia and the Philippines,” noted Mark Dunnachie, the manufacturer’s VP Asia-Pacific.
Even more bullish was John Slattery, chief commercial officer, Embraer Commercial Aviation, who was clear that the Air Costa breakthrough in India is not a one-off. “By every metric, we have real momentum in all the Asia-Pacific markets,” he declared.
Photo shows: Ramesh Lingamaneni, chairman of Air Costa and executive director of LEPL Projects (left) and Paulo Cesar Silva, president and CEO, Embraer Commercial Aircraft.
Bernie Baldwin, editor, Low-Fare & Regional Airlines/LARAnews.net