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India's Air Costa places $2.94 bn order for 50 E-Jets E2 Embraer aircraft

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India's Air Costa places $2.94 bn order for 50 E-Jets E2 Embraer aircraft

Old 13th Feb 2014, 13:33
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India's Air Costa places $2.94 bn order for 50 E-Jets E2 Embraer aircraft

SINGAPORE: Air Costa on Thursday ordered 50 E-Jets E2 aircraft from Brazilian manufacturer Embraer worth $2.94 billion, both companies announced.

The deal with Air Costa also includes purchase rights for 50 more of the aircraft, they said at the Singapore Airshow.

With the orders, Air Costa will become the first customer of the E-Jet E2 in the Indian market when it takes the first delivery in 2018, Embraer, the world's third largest commercial aircraft manufacturer, said in a statement.

Air Costa executives said they would use the jets to fly routes in secondary and tertiary markets in India.

Air Costa is part of India's LEPL Group, a diversified company with interests in property and infrastructure development.

The airline started operations in October last year serving several second-tier Indian cities.

The E-Jets E2 aircraft family can seat between 70 and 130 passengers. "Our focus has been the tier-two and tier-three cities in India," Air Costa chief financial officer Vivek Choudhary told a media briefing.

"Our philosophy is that we believe that 70 percent of the population, of the huge 1.2 billion population in India, still reside in these non-metros," he added.

"And that is where we feel we need to add value and capitalise on the market... basically we are linking the metros to the smaller cities."

Choudhary said the carrier expected the air transport sector in India to grow at "approximately 15 percent on a cumulative average for the next 15 to 20 years".

"The huge size of the middle class in India and the profitability levels that are going up adds to the demand in air travel," he added.

Air Costa chairman Ramesh Lingamaneni brushed off concerns that airport infrastructure in the second-tier Indian cities the carrier is targeting may not be up to scratch.

"There is no question on the infrastructure... They (the government) have given a lot of support.

India's Air Costa places $2.94 bn order for 50 E-Jets E2 Embraer aircraft - The Economic Times
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