Open Skies Open Opportunities for Embraer in Asia

by Neelam Mathews

 - January 14, 2015, 3:44 PM

The Embraer E195 found its first operator in Indonesia when Kalstar Aviation agreed to lease two of the narrowbodies from Aldus Aviation. (Image: Embraer)

As the Association of South East Asian Nations (Asean) prepares to partially implement an Open Skies policy by the end of the year, airlines in the region increasingly eye expansion in low- and mid-density cities. Indonesian operator Kalstar Aviation did its part on Tuesday, when it announced a lease deal covering two Embraer E195s with Dublin-based Aldus Aviation. It plans soon to announce routes from Kalimantan, its base.

“We are proud to be the first Embraer operator in Indonesia and we look forward to enhancing our operations,” said Kalstar CEO Andi Masyhur. “The E195 gives us an opportunity to open new routes and provide better connectivity, frequency and passenger comfort.”

Jets in the 70- to 130-seat category will sustain hub-and-spoke efficiency by complementing narrow-body operations and, in the case of Kalstar, ATR turboprop service. “Those roles will generate significant demand for new aircraft in the segment,” according to Embraer’s 2014- to 2033 market outlook. The OEM expects a large share of the 1,540-unit-strong Asia market to go to its E2 Jet family, notwithstanding competition from MitsubishiMRJ and Sukhoi SuperJet, both of which will primarily serve their home markets, Embraer Commercial Aviation chief commercial officer John Slattery told AIN. In Asia, India’s Air Costa has signed a firm order for 50 E2s—a mix of 25 E190-E2s and 25 E195-E2s—and JAL has signed for 15.

“It’s all about rightsizing and better yields,” said Embraer Asia-Pacific vice president Mark Dunnachie, who noted that 72 percent of flights in the Asia-Pacific region leave with less than a 70-percent load factor. Embraer also sees a need to replace some 200 older aircraft, including Fokker 70s and 100s and legacy Boeing 737s. “As the skies in Asean open, there will be more business as more secondary airports will start to open,” Dunnachie toldAIN.