Aviation
Small is the next big thing in Asia aviation
SINGAPORE – After flying under the radar for many years, manufacturers of smaller jet and propeller-driven passenger aircraft are finding a bigger market in the Asia-Pacific with a slew of orders at the Singapore Airshow.
Canada’s Bombardier (BBDb.TO), Brazil’s Embraer (EMBR3.SA), European joint venture ATR, Russia’s Sukhoi and Japan’s Mitsubishi Aircraft do not roll off the tongue as easily as Airbus (AIR.PA) or Boeing (BA.N), but in the lucrative Asia market there is room for everyone.
Embraer, the world’s largest maker of regional aircraft, forecast in Singapore this week that the region will take delivery of 1,500 new jets of 70-130 seats over the next 20 years. That translates, it says, to a staggering $70 billion worth of business.
Importantly, for the likes of Embraer, the world’s two largest aircraft manufacturers do not make aircraft that compete in the below-130 seat segment.
Low-cost airlines like AirAsia (AIRA.KL), Lion Air, and Cebu Pacific (CEB.PS), with orders for hundreds of Airbus A320s and Boeing 737s, have driven much of the growth in the Asia Pacific airline market.
Increasingly, however, the major hub airports are getting crowded and there is growing demand for services to and between smaller second and third tier cities.
“The great opportunity in Southeast Asia is to get more people to fly, and that is about tier two and tier three cities,” said Torbjorn Karlsson, who leads aircraft sales for Bombardier in Southeast Asia.
He identified countries such as India, where only about 1 percent of country’s one-billion-plus population flies, and Indonesia and Thailand as inviting markets.
COSTA SEES ENORMOUS POTENTIAL
While there may still not be enough passengers to use the A320 or a 737, there is enough for smaller aircraft. And that is where the likes of Embraer and Bombardier come in. Thousands of this type of aircraft have been sold across Europe and the Americas, but relatively few have found their way to Asia. That’s now changing.
Embraer announced its first major Indian deal in Singapore, with start-up Air Costa ordering 50 jets valued at $2.94 billion on Thursday.
In a country like India, where Airbus and Boeing aircraft have saturated the market with airlines like IndiGo, SpiceJet (SPJT.BO) and GoAir, Costa is trying to find a niche for itself by connecting the smaller cities with Embraer jets.
“”You don’t need larger aircraft. This is enough for us,” said Ramesh Lingamaneni, chairman of Air Costa, which began operations in October and now has four Embraer jets. “Regional air services have enormous potential in India.”
Bombardier did not get any orders for its CSeries or CRJ jet aircraft, but Thai low-cost carrier Nok Air NOK.BK said that it would order up to eight of the Canadian company’s Q400 turboprop aircraft.
ATR, which dominates the turboprop market, inked a deal to sell up to eight of its 72-600 aircraft to Thai carrier Bangkok Airways. It also agreed to sell 20 aircraft to leasing firm Dubai Aerospace Enterprise, with options for 20 more, in a deal valued at $1 billion.
Sukhoi displayed a Superjet in the livery of its customer, Indonesia’s Sky Aviation, on the static display at the show. Japan’s Mitsubishi Aircraft and China’s AVIC are also developing aircraft that are expected to compete in the segment, and their executives were busy trying to impress potential customers in Singapore.
“There is lots of room to penetrate more into this market,” Paulo Cesar Silva, president and CEO of Embraer Commercial Aviation, told Reuters.
“You have to have the right aircraft. In the U.S., until two years ago, Delta was flying four times a day on the Boston-La Guardia route using A320s. Now, they place the E-175 11 times a day. You keep the frequency, the load factor is high, and the passenger is happy as every time you head to the airport, there is an aircraft leaving.”
There is intense rivalry within the segment too, with turboprop operators like ATR pointing out that their aircraft are more efficient over these short-haul routes.
“I think it’s partly the economics. On this short distance route the turboprop is the most efficient aircraft. Jets burn twice as much fuel, so costs are much higher. And a lot of these airports are not accessible for jets,” ATR’s head of Global Sales, John Moore, told Reuters.
– REUTERS
An Abuja-Accra flight experienced technical difficulties mid-air on Friday, forcing it to return to Abuja, shortly after departure.
The Nigerian Safety Investigation Board (NSIB) made the disclosure in a statement, adding that it has launched investigation into what it described as a serious accident.
Director, Public Affairs and Family Assistance, NSIB, Bimbo Olawumi Oladeji stated that preliminary investigations revealed the aircraft experienced an engine number two indication issue.
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It was gathered that the aircraft, with registration number 5NKAL which was operating a flight from the Nnamdi Azikiwe Airport, Abuja (DNAA), to Kotoka International Airport, Accra (DGAA).
She explained that four persons were onboard when the incident occurred. The crew immediately requested for a diversion back to Abuja due to the engine indication.
Oladeji added that the crew managed to safely land the aircraft at Abuja Airport at 18:16 UTC.
There were no injuries reported, and all individuals on board are safe.
Nigeria has acquired 12 pre-owned Alpha Jets from the French Air Force as part of efforts to enhance the operational capacity of the Nigerian Air Force (NAF).
The deal, facilitated through SOFEMA, a French military and aeronautics company, was announced by Olusegun Dada, Special Assistant to President Bola Tinubu on via X on Thursday.
He said, “All the 12 aircraft are ready for shipping.”
The Alpha Jet, a product of Franco-German collaboration, is a versatile military aircraft designed for light attack and advanced training missions.
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Equipped to carry bombs, rockets, and missiles, the aircraft also features a gun pod for close air support.
The NAF already operates 11 Alpha Jets, but this latest procurement signals a significant boost to its fleet.
Dada also confirmed that the Air Force is expecting 24 M-346FA light attack aircraft, ordered during the administration of former President Muhammadu Buhari.
The first batch of these Italian-made aircraft is expected to arrive early next year.
Air Chief Marshal Hasan Abubakar, the Chief of Air Staff, described the acquisitions as a testament to President Tinubu’s commitment to bolstering the armed forces.
“This renewal of our aircraft fleet reflects the government’s commitment to ensuring the safety and security of Nigerians,” Abubakar said.
The announcement comes on the heels of President Tinubu’s three-day state visit to France, where he met with French President Emmanuel Macron.
The visit, which took place from November 27 to November 30, highlighted deepening ties between the two nations.
To ensure the sustainability of its expanding fleet, the Air Force has proposed establishing a local maintenance hub.
Speaking in October, Abubakar noted that six units of the M-346FA aircraft were already in production, with the initial batch of three expected to be delivered in early 2025. The full fleet is projected to arrive by 2026.
“These developments underscore the importance of creating a domestic support system for the long-term upkeep of our aircraft,” Abubakar added.
As the holiday season draws near, Aero Contractors has introduced a minimum ticket price of N80,000 for all local flights.
The move, which will last until January 2024, aims to ease the financial burden on Nigerians amid the high cost of living.
Ado Sanusi, Managing Director of Aero Contractors, made the announcement on Tuesday during a press briefing, describing the fare reduction as a gesture to help Nigerians celebrate Christmas and the New Year without the stress of steep ticket prices.
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Sanusi said, “We understand the economic hardship Nigerians are facing, especially with high ticket prices, and we know the holiday season is nearby.
“In the spirit of Christmas, Aero Contractors has introduced what we call pocket-friendly Christmas prices. These fares, starting at N80,000, will apply to all our destinations, allowing Nigerians to travel without excessive costs.”
As of Tuesday afternoon, an economy class ticket from Lagos to Abuja was priced at N99,643, while business class tickets were being sold for N189,167.
Sanusi further explained that the initiative was designed to make it easier for families to reunite during the holidays.
“This is a way for us, as an organization with a long history of serving Nigerians, to give back to our loyal customers. We want to make it possible for families to meet their loved ones during this festive season without worrying about exorbitant travel costs,” he added.
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