Monday, July 5, 2010

Brazil's Embraer proposes regional jets for India

Submitted by admin4 on 4 July 2010 - 2:20pm.

By Neelam Mathews

Sao Jose dos Campos, Brazil : A growing appetite among Indian carriers to serve regional routes makes the country a potentially big market for 250 regional jets with a capacity of up to 120 seats, Brazil's aircraft maker Embraer.

In India, around 250 low-to-medium-density routes remain unused, as they are not profitable to run with narrow-bodied aircraft. Plus, in the non-metros sector, 133 routes have less than one frequency a day, said Brazil-based Embraer.

"This doesn't provide adequate frequency to passengers. No wonder other forms of transport are used such as first-class rail with fares of air travel," said Alex Glock, Embraer's managing director for Asia Pacific.

"With the Indian economy growing and growing rather fast, air services to the so-called secondary cities need to be more frequent - there have to be comprehensive daily services," Glock told IANS in an interview.

At present, out of some 400 aircraft for scheduled commercial operations in India, 261 are narrow-bodied planes and only 20 are regional jets.

A regional jet is generally run on a range of short-to-medium-haul routes with a seating capacity for 100 passengers. Compared with these, narrow-bodied planes, such as the Boeing-737 and Airbus A-320 family, have around 160 seats.

As the economy bounces back and major Indian airlines review their fleet plans, Embraer says it is in discussion with all players as they will be interested in tapping the low-to-medium-density routes where regional jets have a niche.

"We see an imbalance in the Indian regional fleet compared with some matured economies," said Luiz Sergio Chiessi, the company's vice president for market intelligence and airline market.

"Planes with 100-120 seats are an important tool for Indian carriers to feed metro hubs from low-and-medium-density routes," said Chiessi to IANS. "We're like a smaller narrow-body aircraft."

Indian carriers flew 44 million passengers on the domestic circuit last year. Of this, 17 million were concentrated on the 24 city pairs across seven major metro cities, known as Category-One.

These routes, served by narrow-bodied aircraft, run to full capacities. As more aircraft are deployed, a cutthroat fare war can be expected, which may be good for the customers, but not so good for the bottomlines of airline.

The balance 27 million passengers flew ton low-to-medium-density markets - Category-Two and Category-Three destinations. In the medium-density routes, the potential for regional jets is immense. The low-density routes are generally covered by turboprop, Embraer maintained.

In China, for example, 76 percent of regional jets fly to low-to-medium density markets. But India, 29 such destinations were lost as airlines stopped flying to them following low load factors on the narrow-bodied planes.

Chennai-based regional carrier Paramount Airways had five Embraers on lease as part of its fleet but had to return three back following non-payment of dues. But the business model showcased that regional jets could work.

"Their load factors were higher than many others. They could run full planes with many frequencies a day," said Chiessi, adding the benefit of regional jet is: The same cabin comfort of a narrow body and the same volume per sea of an A-320.

Embraer says its E-Jets - smaller E-170 and E-175 and E-190 and E-195 stretched versions - will strengthen the optimal fleet level for Indian carriers as they can compliment other aircraft during off-peak hours and substitute the fleet on medium density routes.

The company expects to announce an order in India by the year-end, which may not be in big initially, as the emerging economy, though ready, is not fully aware of the benefits of running smaller aircraft on low-to-medium density routes.

"We will move in small steps. But we will get there," said Chiessi.

No comments:

Post a Comment