IndiGo in early talks with Embraer SA for large regional jet order

 InterGlobe Aviation Ltd., the parent company of India's biggest airline IndiGo, is in talks with Embraer SA over a possible large regional jet order, according to people familiar with the matter. 

IndiGo is considering purchasing dozens of Embraer E2 aircraft to replace its fleet of turboprop-powered ATRs as well as to bolster capacity, said the people, who asked not to be identified because the information is confidential. The discussions are at an early stage and there's no guarantee of an order, they said.

  A deal, which could be valued at billions of dollars before customary industry discounts are applied, would be the biggest for the Brazilian manufacturer in India and brings it closer to establishing a full aircraft assembly line in the country. Embraer Chief Executive Officer Francisco Gomes Neto has previously said the planemaker needs to win orders for at least 200 of its E175 regional jets before it considers an Indian assembly facility. 

 

Spokespersons for IndiGo and Embraer did not immediately respond to an emailed request for comments.

  India is the world's third-largest market for air travel and growing rapidly, according to the industry body IATA. But with no commercial assembly in the country, the industry relies on foreign manufacturers for their planes. IndiGo and Air India Ltd. hold some of the industry's largest orders for new Airbus SE and Boeing Co. jets.

  Adani Partnership

  Embraer has already announced a partnership with billionaire Gautam Adani's conglomerate to build aircraft in India, a major boost to the Narendra Modi-led administration's plan to transform the country into a global manufacturing hub. The Brazilian firm also inaugurated its India office in New Delhi last October, underscoring the company's ambitions.

  Separately, Embraer is in talks with Star Air, India's largest regional carrier, over the purchase of as many as 20 aircraft for about $1 billion, Bloomberg News has previously reported. 

  IndiGo's fleet stood at 441 planes, including 46 ATR regional turboprops, according to company data as of March. The airline still has around 900 aircraft slated for delivery over the next decade and has traditionally ordered most of its planes from Airbus, making an Embraer order a significant shift.