Ambitious Air Costa

The only exclusive regional airline in India, Air Costa, is planning to become a scheduled airline soon with pan-India connectivity and it has applied to the Directorate General of Civil Aviation (DGCA) for the change in their status.

Delving into details of their plans, the Chairman of Air Costa, Ramesh Lingamaneni told SP’s AirBuz that the process may take about three months. In the meantime, in the period February-March 2015, Air Costa will take on lease another two Embraer aircraft followed by another two in July-August, taking the total aircraft with the airline to eight. Air Costa completed one year of existence as of October 15 this year and the company is celebrating its first anniversary with ambitious plans in the pipeline.

Ramesh Lingamaneni said that the airline would also go international as and when the 5/20 rule (five years operation and 20 aircraft) that applies to start-up airlines is relaxed either on its own or with an international partner, both options being open at the moment. However, he was categorical that for domestic operations, it would firmly stick with Embraer aircraft and for international operations it would look at suitable aircraft. He mentioned that some international players had evinced interest in the airline, but “Air Costa is in no hurry. We have planned our moves carefully. We want to go slow and steady.”

The airline, he said, is expected to achieve total break-even by March 2015, thanks to the good passenger load factors Air Costa is recording. The average passenger load factor is at 71 per cent. In May this year it flew over 50,000 passengers and the average utilisation of the aircraft was about nine and a half hours. The two Emraer E-190 aircraft with seating capacity of 112, are clocking a utilisation rate of 14.5 hours while the two E-170 aircraft for short haul are flying 7.5 hours a day.

Ramesh Lingamaneni said that the airline industry was fraught with challenges and Air Costa was ready to overcome these, whether it was capital infusion or regulatory provisions. Of the promoters stake of $100 million, about $65 million has been used, giving the airline sufficient buffer before it thinks of external borrowings. He is hopeful that the present government at the Centre would carry out the necessary reforms in the aviation sector and that the Minister for Civil Aviation Ashok Gajapathi Raju has a positive approach to this issue and there has been some forward movement.

Talking about pan-India connectivity, the CEO of Air Costa said that the airline would “play to its core strength” that of connecting Tier-II and III cities to the major metros. “We are here to connect underserved and virgin destinations and we see potential.” The phase I of the airline operations (2013-14) was to focus on the Southern region and phase II (2015-17) is to connect pan-India. Phase III (2018-22) will factor in international operations.

Demerger

The Chief Financial Officer, Vivek Choudhary told SP’s AirBuz that Air Costa which is part of the LEPL Group, the holding company which is involved in real estate, infrastructure, power, etc, would be going in for demerger soon. The new entity will be called LEPL Airlines Pvt Ltd and in so doing, the company will be able to attract private equity investments to fund its future expansion plans. The delivery of the 50 Embraer E-Jets which the airline ordered at the Singapore Air Show in 2014, is expected to commence in 2018.

Asked about how the airline shifted choice of aircraft from Bombardier to Embraer, Vivek Choudhary said: “We keenly watched SpiceJet and found that there were certain challenges including maintenance support and as we were going only regional, Embraer was the right fit. As regards ATR, you know it is not available in the open market.” On its aircraft acquisitions, Vivek Choudhary clarified that the 50 E-Jets on order, would be on the basis of ‘sale and lease back’ options and all acquisitions before 2018 would be on lease.

Ramesh Lingamaneni said that two acres of land had been acquired in Vijayawada for locating the proposed maintenance, repair and overhaul (MRO) facility to handle up to C-checks.

Ramesh Lingamaneni was full of praise for the present State Government for its initiatives towards facilitating business activity in the aviation sector. It had reduced sales tax on aviation turbine fuel (ATF) to one per cent from 16 per cent and this is a good incentive. The State of Tamil Nadu currently has the highest rate of sales tax on ATF which stands at 29 per cent. With regard to regulatory issues, Captain Babu, pilot in Air Costa, mentioned that the government has been having regular meetings of CEOs of airlines where issues are taken up.

Air Costa as of date connects nine cities—Vijayawada, Chennai, Visakhapatnam, Bengaluru, Hyderabad, Jaipur, Tirupati, Coimbatore and Ahmedabad—operating a total of 38 daily flights on a daily basis.

Happy with E-Jets

Air Costa’s E-190-E2s will be configured with six business class and 92 economy class seats. The larger E-195-E2 will have 12 business class and 106 economy class seats. The airline is confident about the future of regional aviation in India given its impressive performance since it was launched four months ago. The carrier is filling an average of 74 per cent of the seats on every flight on the two E-170s it is currently flying to six cities. Two E-190s are scheduled for delivery this month with another aircraft arriving every quarter through 2018 when the first E-190-E2 arrives.

The E2s are fourth-generation with full fly-by-wire (FBW) that enhances handling qualities and maximises fuel-efficiency. The E2 will take advantage of the FBW expertise developed by Embraer for the E-Jets, Legacy 500 and the KC-390. E2 three-axis closed loop system improves aircraft stability during turbulence and provides complete envelope protection in all phases of flight. The closed loop configuration allows the E2 empennages to be smaller thus reducing in-flight drag and weight of the aircraft. E2’s advanced integrated avionics system provides exceptional situational awareness enhanced by large landscape displays and reduced pilot workload. Innovative technologies such as synthetic vision and advanced flight management, support more fuel-efficient direct approaches to airports. Cockpit commonality with current-generation E-Jets allows for a smooth transition by pilots to the new E2 platform.

The E2s sport high-aspect ratio wings with swept wing-tips that, combined with redesigned pylons and other aerodynamic improvements, coupled with enhanced fourth-generation full FBW, achieve double digit lower fuel consumption compared to current-generation E-Jets. The wing and engine combination for the E-175-E2 and a common larger wing and engine for the E-190-E2/E-195-E2 are optimised to deliver maximum performance.

Interior Design for a New Generation

A look inside an E2 jet reveals thoughtful, well-conceived design that has the power to please from all perspectives. A totally new environment far exceeds the norm and thoughtfully addresses the varied needs of passengers, crew, airlines and leasing companies alike.

As within a fashionable hotel or restaurant, a prevailing sense of quality begins with the welcoming atmosphere at the boarding point and continues with such elements as style and tone of lighting, contemporary materials, quality fabrics, and glass partitions. Within these surroundings passengers enjoy their own physical and emotional “space within a space”, their “personal territory.”

This “bubble” with control is achieved through the coming together of small things that deliver a larger benefit, elements such as clarity of seat signage, individual PSUs, seat back screens and additional leg room in economy class.

The passenger-preferred 2x2 configuration gives a perception of wider aisles while simplifying movement through the cabin. The position of bin doors when open, coupled with dramatic ceiling illumination, creates a sense of height and space above the aisle.

Premium seating further conveys a feeling of openness. Overall, the E2 interior generates a smoothing-out effect on the passenger journey experience, reducing the traditional stress points of boarding, in flight activity and disembarking.