New Delhi/Mumbai: A month after the Union government unveiled a new policy for regional airlines, makers of small planes that can carry up to 100 passengers are wooing aviation start-up firms that could end up as big buyers of such aircraft.
Three airlines in South India—Air Dravida, EmricAir and Star Aviation—have applied for a regional airline licence from the ministry of civil aviation, with another half a dozen expected to follow suit. These airlines, together with the existing scheduled carriers, are expected to buy at least 300 aircraft in the next few years, the ministry estimates.
Small jets and turboprops, priced at between $20 million and $40 million (Rs80 crore and Rs160 crore) before discounts, capable of seating 40- 100 passengers, are considered ideal for regional carriers given the short hops they fly and the fuel efficiency offered.
A Bombardier CRJ 900. Planes made by firms such as Embraer of Brazil and Bombardier of Canada are considered ideal for regional carriers, given the short hops they fly and the fuel efficiency offered
Such planes are mostly made by Brazil’s Brasileira de Aeronáutica SA, better known as Embraer, Canada’s Bombardier Inc. and Frenchturboprop maker ATR, a subsidiary of Airbus SAS. Just 13 regional jets from Embraer and Bombardier are part of the country’s fleet of more than 250 aircraft currently.
Regional airlines are being wooed with attractive packages, said the chief executive of a full-service airline. “The range of discount depends upon deep pockets and expansion plans,” said the CEO, who did not want to be named.
He said Bombardier aeroplanes have become the natural choice for start-up airlines since other plane makers were unable to make early deliveries of aircraft. “We are looking at both of them, zeroing in on (Bombardier’s) CRJ700 to start operations early next year. Within a month we shall be able to confirm the deal,” said Martin Sebastian, CMD of EmricAir Aviation Pvt. Ltd that plans to start operations with two planes.
Aviation analyst Pran S. Dasan, who is helping some regional players with aircraft selection, said the decision to buy a regional aircraft could also be influenced by the Russian-made Sukhoi SuperJet 100 that is expected to be in-service by 2009.
Besides delivery, aviation executives and analysts said other issues such as service support are also being worked upon. Unlike large plane makers Boeing Co. and Airbus which, between them, have shared most of the country’s passenger jet sales, new entrants (except ATR) have little back-end support for maintenance of aircraft, pilot training and other checks.
For example, Paramount Airways Pvt. Ltd, which uses five leased Embraer planes, sends them for checks to Portugal or Singapore, making it an expensive proposition.
“They will need to give a better deal or some kind of sops to make the (initial) operations viable,” said a senior airline executive with plans of launching an airline from the South. This executive did not wish to be named as his airline’s launch is still being planned.
Airlines choose planes keeping in mind variables such as spares, pilots, routes they fly and lease rates, among several others, said Dasan, an analyst with Pathfinders Aviation.
Given the expected demand and competition, Embraer may already be setting an aircraft maintenance centre in Madurai as part of a 40-plane deal with Paramount Airways, the airline’s managing director, M. Thiagarajan, said last week. On Monday, an Embraer spokeswoman declined to comment before “final agreements have been reached by all parties”.