Air Costa Introduces Embraer E-Jets for Indian Launch

Indian start-up carrier Air Costa is on track to launch operations next month and was confirmed at this week’s Paris Air Show as a customer for the E-Jet family of aircraft of Brazilian manufacturer Embraer. The airline, which plans to launch domestic operations in the country, has acquired two E170s from Embraer’s ECC Leasing business and a new E190 directly from the manufacturer, a commitment already included in its orderbook as being placed by an undisclosed customer.

“Air Costa has chosen E-Jets for their efficiency and reliability. Our plan is to link underserved markets in India with more direct flights,” said Captain Babu, Chief Executive Officer, Air Costa. “The E170 and E190 are ideal in size and range. We can add frequencies and routes without adding too much capacity, thus serving places with seasonal demand, as well as key secondary and tertiary business centers.”

Air Costa will initially connect cities in southern India such as Bangalore, Chennai, Hyderabad and Vijayawada, as well as key secondary cities in the north and northwest of the country. Its first aircraft - two former Gulf Air E170s - have already been painted into the carrier’s livery and are being prepared for services as soon as final regulatory approvals are received from the Indian Directorate General of Civil Aviation (DGCA).

The start-up will be based at Vijayawada in the southern Indian state of Andhra Pradesh, and is the region’s third largest city after Hyderabad and Visakhapatnam. Vijayawada Airport was previously served by Kingfisher Airlines with regular flights to Bangalore and Hyderabad but Jet Airways, Air India and SpiceJet now also serve the single runway facility.

Jet Airways entered the market with flights from Hyderabad in March 2011, SpiceJet followed in September 2011, while Air India increased competition in October 2011. SpiceJet subsequently added services from Bangalore and Rajahmundry in July 2012 and Chennai in December 2012, but ended the kinks to Rajahmundry and Chennai earlier this year.

“Regional services have a lot of potential in India especially as the economy of South Indian cities is booming. We are committed to further growth in the Indian market with additions to our fleet and launching new routes over the medium term.” said Ramesh Lingamaneni, Chairman and Managing Director, Air Costa. “We are very pleased with the support that Embraer has provided to date for the launch of our Air Costa and we look forward to a long successful and mutually rewarding relationship.”

Embraer believes that the E-Jet will fit well into the Indian market and will promote greater regional connectivity in India. “Embraer has always maintained that the regional aviation market in India has tremendous potential. Our E-Jets are the right sized aircraft for service between secondary and tertiary markets which are underserved and, in fact, growing faster than metro markets,” said John Slattery, Chief Commercial Officer, Embraer Commercial Aviation.

In the table below we highlight the largest O&D markets from Vijayawada in 2012. With the strong connectivity to Hyderabad it is no surprise that the state capital dominates the analysis, but it also provides a gateway to other destinations across India and abroad. According to the MIDT data passengers travelled between Vijayawada and 39 different countries in 2012, although 99.4 per cent of the total demand was on domestic city pairs.