Page 21 - AAA MARCH - APRIL 2014 Online Magazine

FEATURE REGIONAL

Our next focus is on providing air connectivity
to remote and interior areas of the country by
developing low cost airports and encouraging
the growth of regional airlines

– Civil Aviation Minister Ajit Singh

and with the options, the deal’s value may “We decided to strategically focus on
be about $5.88 billion at list prices. improving air connectivity in tier 2 and
However, the airlines, based in tier 3 towns as we believe there is a large
southern India, won’t be taking the market in India that is yet to be touched
delivery of all the 50 aircraft in one stroke. by the benefits of the aviation revolution,”
According to Ramesh Lingamaneni, says a SpiceJet spokesman.
Chairman of Air Costa,”It is the cumulative Airframer Embraer forecast that
number of jets that we would buy from airlines in the Asia-Pacific region,
Embraer over the next several years. The including India and China, will take
actual delivery will be one a quarter or delivery of 1,500 new aircraft worth $70
four a year on an average.” billion in the 70-to 130-seat category
“From January 2018 onwards, delivery over the next two decades, accounting for
of four aircraft will be taken every year for about a fifth of the global demand. “This
the next 20 years. It is a business plan for is because air transport demand in the
the next 20 years. It is a 100 aircraft deal region will increase 6% annually by 2032,
with 50 firm and 50 optional,” he explains. led mainly by China and India,” it says.
Currently, Air Costa operates two Embraer’s rival Bombardier, despite
aircraft and another two will be operational the loss of the Air Costa order, feels that
by March end,” says Lingamaneni. there is plenty of room to grow in the
Interestingly, Air Costa operates 12 regional aviation market.
flights a week and all its routes has over “Air Costa is not a lost opportunity for
80% occupancy ratios. “Many have failed us. We clearly believe that with the number
in spotting the business opportunities of trusted commercial discussions we are
of catering to the growing needs of rich having and the right timing Bombardier
runways, and the development of airports and affluent in tier-II and tier-III towns,” will be able to announce deals in future,”
in smaller towns are expected to spur the Lingamaneni quips. says Bombardier’s Vice President for
development of regional aviation. The regional market is currently Commercial Aircraft Sales in Asia
Till recently, the major share of the under-penetrated and demand is growing Pacific Toby Karlsson in an interview to a
regional airlines market was cornered at nearly double the pace at the metros television channel.
by Brazilian manufacturer Embraer’s amid escalating disposable incomes and The Indian government also, despite
ERJ series, Bombardier’s CRJ series, economic growth. Airports Authority of the current turbulence in the commercial
and the TR 72s. But, new players such India (AAI) expects air traffic from non- aviation space, sees robust growth ahead
as Mitsubishi Aircraft Corp., Sukhoi Co. metro airports to rise to 45%-50% of total for the aviation sector if airlines reduce
and Aviation Industry Corporation of air traffic in India in the next few years, up tariff, induct small aircraft and connect
China (AVIC) have increased segment from 35%-40% at present. cities beyond metros.
competitiveness, says Mathur. Indian low cost carrier SpiceJet “Our next focus is on providing air
India’s regional aircraft fleet is continues to enhance connectivity to tier- connectivity to remote and interior areas
expected to grow from 55 in 2011 to as II and tier-III cities and towns with the of the country by developing low cost
many as 261 by 2025 at a compound addition of Q400 turboprop aircraft to its airports and encouraging the growth of
annual growth rate of 12%-13%, he adds. fleet. The carrier has announced plans to regional airlines,” Civil Aviation Minister
Air Costa’s order comprises upgraded establish five more regional hubs in an Ajit Singh says.
E2 lineup airplanes from Embraer-- 25 effort to expand its regional network and India’s Directorate General of Civil
E190 model and an equal number of E195. connect all major towns through its Q400 Aviation (DGCA) a couple of years ago
Air Costa has options for 50 more aircraft regional fleet. eased the requirements for regional
WWW.ASIANAIRLINES-AIRPORTS.COM MARCH / APRIL 2014 ASIAN AIRLINES & AIRPORTS 21