Embraer wins first Indonesia aircraft deal, bets on SE Asia’s second-tier cities | Reuters

The world’s largest maker of

regional aircraft has nearly 200 commercial planes in service in

Asia Pacific with 20 operators.

In recent years, Southeast Asia has emerged as a hot spot

for Airbus and Boeing as the likes of AirAsia

and Lion Air place record orders for narrow-body

aircraft such as A320s and 737s, to cater to the region’s

population of 600 million.

“We are not saying we want to replace A320s, 737s, ATRs. We

complement the larger narrow bodies,” said Mark Dunnachie,

Embraer’s sales chief for commercial aviation for Asia Pacific.

Kalstar, which has a fleet of more than 10 planes including

turbo-prop ATR aircraft serving places like Berau and Semarang,

plans to open new routes and frequencies with the planes, said

Kalstar Chief Executive Officer Andi Masyhur.

As bigger hub airports become more crowded and demand grows

for services to and between smaller second- and third-tier

cities, Embraer sees a market opening up for its family of

aircraft that can carry between 70 and 130 passengers.

(Editing by Kenneth Maxwell)

SINGAPORE Jan 13 Brazilian aircraft maker

Embraer SA is supplying its first jets to an

Indonesian airline as cost-conscious Southeast Asian carriers

seek smaller planes to serve the region’s second-tier cities

more efficiently than large aircraft.

“What’s happening now is that we are getting a lot of

development in wealth in the secondary and tertiary cities and

by definition, those cities are not large enough to support high

frequencies with (Boeing) 737s and (Airbus) A320s to do that

profitably,” John Slattery, chief commercial officer at Embraer

Commercial Aviation, told Reuters in an interview.

Though small, the Kalstar deal comes as competition

intensifies in the regional jet market, with Japan’s Mitsubishi

Aircraft entering a segment where Canada’s Bombardier Inc

also operates.

But Slattery said 80 percent of the airlines in the Asia

Pacific region were unprofitable in 2014 as intense competition

is forcing carriers to drop prices to fill seats.

Embraer said on Tuesday that Kalstar Aviation, based in

Indonesia’s Kalimantan province, is leasing two E-195 planes

from Ireland’s Aldus Aviation. Last February, Embraer clinched its

first major Indian deal for 50 jets, valued at $2.94 billion,

from start-up Indian carrier Air Costa.

Posted June 7th, 2015 in Uncategorized.

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