Vijayawada-based airline Air Costa has signed an agreement with Embraer S.A. to buy 50 E-Jets E2s with an additional 50 purchase rights.

According to an airline release, the acquisition is a mix of 25 E190-E2s and 25 E195-E2s at an estimated value of $2.94 billion. 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 the value can reach $5.88 billion, if all are exercised.

Air Costa will take delivery of the E190-E2 in 2018. The E195-E2 is scheduled to enter service in 2019. The airline at present flies four E-Jets: two E170s and two E190s. Air Costa’s E2s will feature new-design cabins with an even higher standard of comfort and more personal space.

Embraer Commercial Aviation President & CEO Paulo Cesar Silva said the E2s had proven themselves in China and Brazil.

LEPL Group Executive Director and Chairman of Air Costa Ramesh Lingamaneni said: “Regional air services have enormous potential in India, especially the ones connecting Tier-1, Tier-2 and Tier-3 cities.”

Our Mumbai correspondent writes:

“This new order reflects a long-term commitment of the airline to the business which is welcome. It is a big boost for Embraer which has been struggling in India. Funding is critical to ensure the order gets executed. The management strength at Air Costa is, at present, weak and remains unaddressed. The network design needs to be developed in line with the mission of the aircraft. At present clear challenges are visible,” Kapil Kaul, CEO, South Asia, Centre for Asia Pacific Aviation, told The Hindu while commenting on the development.

Captain K. N. Babu, CEO, Air Costa, said that the airline, which would be adding four aircraft a year, would have 20 aircraft by the time the aircraft on order would be delivered.

“Currently we are flying to six destinations and will add three more when one new aircraft will join the fleet in March. We just completed one quarter and are having 73 per cent load factor as we are not flying in crowded metro routes. We will soon apply for pan-India licence,” Captain Babu told The Hindu.

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