Embraer took a giant step toward boosting its modest presence in the South Asian market at the Singapore Airshow on Thursday with a firm order for 50 E-Jet E2s and purchase rights on another 50 from Indian regional carrier Air Costa. The order calls for delivery of a mix of 25 E190-E2s and 25 E195-E2s worth $2.94 billion at list prices. If Air Costa exercises its purchase rights for 25 more of each of the models, the value of the transaction will rise to $5.88 billion.
Now flying a pair of E170s to six cities, Air Costa has registered an average load factor of 74 percent since it launched operations in October. It expects to take delivery of two E190s leased from GECAS this month, then another Embraer E-Jet every quarter starting in July until it takes its first E190-E2 in the first half of 2018. Plans call for delivery of the first E195-E2 a year later.
Although it currently connects relatively major cities in the south of India such as Bangalore and Hyderabad, Air Costa’s ambitions lie mainly with providing underserved second- and third-tier markets with modern air transport options. Speaking at a Singapore show press conference, Air Costa chairman Ramesh Lingamaneni noted that some 70 percent of India’s population lives outside major metropolitan areas.
“Regional air services have enormous potential in India,” said Lingamaneni. “The E2s will give us right-sized seat capacity for us to cater to the future target markets and unit costs that are competitive with larger-re-engined single-aisle aircraft.”
Air Costa is a division of the privately held LEPL Group, which holds interests in property and infrastructure development in the commercial, residential, education, power and health services.