SINGAPORE Feb 13 Embraer SA, the
world's largest maker of regional aircraft, clinched its first
major Indian deal for 50 jets valued at $2.94 billion from
start-up Indian domestic carrier Air Costa.
Air Costa will become the first customer of the E-Jet E2s,
the upgraded re-engined variants of the company's aircraft, in
India when it receives its first aircraft in 2018, company
officials told a media briefing at the Singapore Airshow on
It will be the first airline to order and operate a large
number of regional jets in India, a market which has seen
substantial losses in recent years due to over-capacity and
intense price wars among its carriers.
Observers, however, believe that there is substantial
potential for growth in passenger traffic between the non-metro
cities, a market which Air Costa is targeting.
The airline ordered 25 E190 E2 and 25 E195 E2 jets, with a
capacity of between 98 and 118 passengers, and has options for
50 more. The airline, which operates three of the current
variants of the E190, plans to get four aircaft each year from
leasing companies until 2018 for its growth plans.
The deal is a boost for Embraer, which met its delivery
targets for its commercial and executive segments last year
after a surge in sales in the fourth quarter.
In an interview with Reuters, Ramesh Lingamaneni, chairman
of Air Costa, said the airline would use the jets to expand its
southern regional footprint and then eventually become a
Air Costa currently operates a fleet of four aircraft in the
southern Indian cities of Bangalore, Hyderabad, Chennai and
other cities. The airline, which only started operations in
October, is part of the privately held LEPL Group, a diversified
company with interests in property development and
Low-cost, no-frills, airlines led by IndiGo account for
about 70 percent of domestic traffic, while AirAsia is
set to start operations this year and a venture of the Tata
Group and Singapore Airlines will also start full