SINGAPORE Feb 13 After flying under the radar
for many years, manufacturers of smaller jet and
propeller-driven passenger aircraft are finding a bigger market
in the Asia-Pacific with a slew of orders at the Singapore
Canada's Bombardier, Brazil's Embraer,
European joint venture ATR, Russia's Sukhoi and Japan's
Mitsubishi Aircraft do not roll off the tongue as easily as
Airbus or Boeing, but in the lucrative Asia
market there is room for everyone.
Embraer, the world's largest maker of regional aircraft,
forecast in Singapore this week that the region will take
delivery of 1,500 new jets of 70-130 seats over the next 20
years. That translates, it says, to a staggering $70 billion
worth of business.
Importantly, for the likes of Embraer, the world's two
largest aircraft manufacturers do not make aircraft that compete
in the below-130 seat segment.
Low-cost airlines like AirAsia, Lion Air, and Cebu
Pacific, with orders for hundreds of Airbus A320s and
Boeing 737s, have driven much of the growth in the Asia Pacific
Increasingly, however, the major hub airports are getting
crowded and there is growing demand for services to and between
smaller second and third tier cities.
"The great opportunity in Southeast Asia is to get more
people to fly, and that is about tier two and tier three
cities," said Torbjorn Karlsson, who leads aircraft sales for
Bombardier in Southeast Asia.
He identified countries such as India, where only about 1
percent of country's one-billion-plus population flies, and
Indonesia and Thailand as inviting markets.
COSTA SEES ENORMOUS POTENTIAL
While there may still not be enough passengers to use the
A320 or a 737, there is enough for smaller aircraft. And that is
where the likes of Embraer and Bombardier come in. Thousands of
this type of aircraft have been sold across Europe and the
Americas, but relatively few have found their way to Asia.
That's now changing.
Embraer announced its first major Indian deal in Singapore,
with start-up Air Costa ordering 50 jets valued at $2.94 billion
In a country like India, where Airbus and Boeing aircraft
have saturated the market with airlines like IndiGo, SpiceJet
and GoAir, Costa is trying to find a niche for itself
by connecting the smaller cities with Embraer jets.
""You don't need larger aircraft. This is enough for us,"
said Ramesh Lingamaneni, chairman of Air Costa, which began
operations in October and now has four Embraer jets. "Regional
air services have enormous potential in India."
Bombardier did not get any orders for its CSeries or CRJ jet
aircraft, but Thai low-cost carrier Nok Air said that
it would order up to eight of the Canadian company's Q400
ATR, which dominates the turboprop market, inked a deal to
sell up to eight of its 72-600 aircraft to Thai carrier Bangkok
Airways. It also agreed to sell 20 aircraft to leasing firm
Dubai Aerospace Enterprise, with options for 20 more, in a deal
valued at $1 billion.
Sukhoi displayed a Superjet in the livery of its customer,
Indonesia's Sky Aviation, on the static display at the show.
Japan's Mitsubishi Aircraft and China's AVIC are also developing
aircraft that are expected to compete in the segment, and their
executives were busy trying to impress potential customers in
"There is lots of room to penetrate more into this market,"
Paulo Cesar Silva, president and CEO of Embraer Commercial
Aviation, told Reuters.
"You have to have the right aircraft. In the U.S., until two
years ago, Delta was flying four times a day on the Boston-La
Guardia route using A320s. Now, they place the E-175 11 times a
day. You keep the frequency, the load factor is high, and the
passenger is happy as every time you head to the airport, there
is an aircraft leaving."
There is intense rivalry within the segment too, with
turboprop operators like ATR pointing out that their aircraft
are more efficient over these short-haul routes.
"I think it's partly the economics. On this short distance
route the turboprop is the most efficient aircraft. Jets burn
twice as much fuel, so costs are much higher. And a lot of these
airports are not accessible for jets," ATR's head of Global
Sales, John Moore, told Reuters.