Embraer S.A. (NYSE: ERJ, BOVESPA: EMBR3) has signed a definitive agreement with India's Air Costa for a firm order for 50 E-Jets E2s with an additional 50 purchase rights. The acquisition is a mix of 25 E190-E2s and 25 E195-E2s and has an estimated value of USD 2.94 billion based on 2014 list prices. The purchase rights are for an additional 25 E190-E2s and 25 E195-E2s, bringing the total potential order to up to 100 aircraft and can reach USD 5.88 billion if all are exercised. This transaction raises the total E-Jets E2 orders to 200 firm and 200 options/purchase rights since the launch of the E2 program, in June 2013.
Air Costa has become the first customer of E-Jet E2s in the Indian market and will take delivery of the E190-E2 in 2018. The E195-E2 is scheduled to enter service in 2019. Today, the airline flies four E-Jets: two E170s and two E190s. Air Costa is based out of Vijayawada, Andhra Pradesh.
"E-Jets have proven their ability to stimulate traffic and sustain airline profitability while providing affordable and comfortable air travel to people in emerging markets like Brazil and China. I see the domestic Indian market developing in a similar way with both the current E-Jets and of course the E2s. I congratulate Air Costa for its vision in seizing the opportunity to bring greater connectivity within India and we are sincerely grateful for the airline's confidence in Embraer," said Paulo Cesar Silva, President & CEO, Embraer Commercial Aviation.
Air Costa is currently connecting cities in southern India such as Bangalore, Chennai, Hyderabad and Vijayawada, as well as key secondary cities in the North and Northwest of the country. The airline plans to link underserved markets with more direct flights, increasing frequencies and routes, thus serving growing metropolitan areas, as well as key secondary and tertiary business centers.
Ramesh Lingamaneni, Executive Director of LEPL Group and Chairman of Air Costa, the aviation vertical of the Group, noted "regional air services have enormous potential in India, especially the ones connecting tier one, two and three cities. Our initial experience with our current E-Jets has been very positive. Our passengers have complimented the aircraft on its comfort and point-to-point convenience. The E2s will give us right-sized seat capacity for us to cater to the future target markets and unit costs that are competitive with larger re-engined single aisle aircraft."
Air Costa's E2s will feature new-design cabins with an even higher standard of comfort and more personal space. The E190-E2 will be configured with 98 seats in dual class layout, with six seats in first class, and the E195-E2 with 118 seats, with 12 seats in the first class.
Embraer's E-Jet E2s demonstrates the company's commitment to continuous improvement into its line of commercial jets and leadership in the 70 to 130-seat jet aircraft capacity segment. The three new airplanes (E175-E2, E190-E2, and E195-E2) have geared turbofan engines from Pratt & Whitney, new aerodynamically advanced wings, full fly-by-wire flight controls, and advancements in other systems that will deliver double-digit improvements in fuel burn, maintenance costs, emissions, and external noise compared to current-generation E-Jets.
Source: Embraer - Empresa Brasileira de Aeronautica S.A. (NYSE: ERJ)
Date: Feb 13, 2014