Bombardier, Embraer pitch small jets for domestic connect

At present, domestic airlines fly narrow-bodied Boeing 737s or Airbus A320s, which have about 180 seats

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Aircraft manufacturers Bombardier and Embraer are making a pitch for small jets to connect Tier-II and Tier-III towns with metros. With these jets, which have fewer than 120 seats, these companies are promising lower seat-km costs.

Seat-km cost is the unit cost incurred to fly a certain number of passengers on a particular route.

Currently, domestic airlines fly narrow-bodied Boeing 737s or Airbus A320s, which have about 180 seats. While Air India, Jet Airways and SpiceJet fly turboprops (40-80 seats), regional operator Air Costa flies two Embraer E-170 jets, with 67 seats, in south and west India.

To expand its regional network, Air India has invited bids for eight 70-80 seater turboprops, while IndiGo is exploring plans to create a separate subsidiary to link small towns with ATR turboprop planes. Last month, Air Costa had ordered 50 Embraer E190-E2 and E195-E2 jets, with a capacity of 98-118 seats. Deliveries of the E2 jets will begin in 2018.

Brazilian aircraft manufacturer Embraer sees strong growth prospects for small jets in India.

Mark Dunnachie, vice-president (Asia-Pacific), Embraer Commercial Aviation, says, “About 84 per cent of all routes in the Asia-Pacific have demand of less than 300 seats. Airlines need to have aircraft that offer the right capacity and cost structure. The E2 jets will offer 20 per cent lower trip costs than a Boeing 737 Max or an Airbus A320neo. In 10-20 years, we expect demand for 200 aircraft in the 70-120-seater category from India. We expect we will have a significant share of that.”

The E2 aircraft will give Indian airlines flexibility to redraw schedules — airlines can fly a Boeing 737 or an Airbus A320 during the morning rush hour and a 120-seater in the afternoon, with travel demand is low. Dunnachie said many airlines, including LOT Polish Airlines and Jet Blue, deploy Embraer jets during non-peak hours.

Canadian company Bombardier is in talks with Indian airlines to sell its new CS-100 and CS-300 aircraft, which can seat 108-130 in twin-class configuration. In a single-class format, the aircraft can seat 125-160. It is expected these planes will be brought into service in 2015.

So far, Bombardier has received orders for 201 C-series planes, though none from India. SpiceJet flies 15 Bombardier Q-400 turboprops and has an option to acquire another 15 Q-400s.

Nilesh Pattanayak, regional vice-president of Bombardier's business aircraft division, foresees good prospects for the C-series planes in India, owing to the stiff competition and thin margins here. "We believe there will be strong growth on metro-to-non-metro routes. The C-series offers lower seat-mile costs and a lower break even for airlines; it is best to connect tier-I cities with tier-II ones and tier-I cities with foreign destinations."

Genevieve Roy-Theriault, Bombardier's senior advisor (public relations), said, "We are in discussions with SpiceJet regarding Q-400s options."

"Every airline has operational challenges while inducting new aircraft. We are working closely with SpiceJet to make the Q-400 operations successful," added Pattanayak.

Analysts, too, feel there is demand for 100-seater planes, which can fly on routes with less or no competition, and optimise yields for airlines. "India is a vast market. There's no 'one-shoe-fits-all' solution. On many routes in which we see 50-60 per cent seat factor, a 100-120-seater might make ample sense," says Amber Dubey, partner and India head of aerospace and defence at global consultancy KPMG.

70-120 seaters operating in India

Embraer E-170: It has 67 seats. Flown by Air Costa

Bombardier Q400: It has 78 seats. Flown by SpiceJet

ATR-72: It has 62-68 seats. Flown by Jet Airways

ATR-42: It has 48 seats. Flown by Air India (Alliance Air)

CRJ: It has 70 seats. Flown by Air India (Alliance Air)