With aviation touching the hinterlands of the country - many smaller towns like Bellary, Pathankot have been connected by air and many more will be connected soon - the demand for regional jets is likely to soar in the coming years.
Higher jet fuel prices and insufficient demand to fill up the larger 180-seater jets on non-metro routes is forcing carriers to use smaller, more fuel-efficient propeller planes or jets to act as feeders to networks connecting bigger cities.
In the next two decades, it is estimated that India will need around 350 regional jets (typically these are turboprop planes which seat less than 100 people and fly within the country), orders for which are likely to be placed in the next two years.
Regional jet manufactures like ATR, Bombardier and Embraer are gearing up to tap the opportunity, and are showcasing their latest products at Aero India, the defence and aerospace exhibition being held here in Bangalore.
Studies show that 80 per cent of the flights fly with less than 80 people on board. Brazilian aircraft maker Embraer estimates that India will need nearly 165 planes of 30-120 seats, accounting for 40 per cent of the demand in Asia-Pacific region.
On list prices, these aircraft could cost $4 billion or 17,628 crore, with majority of the planes required likely to be in the 61-120 seat capacity. More than two thirds of the demand will come from growth while the rest will be replacement demand.
Currently only Coimbatore-based Paramount Airways operates the Embraer jets. But as there is consolidation in the market, there will be a need to fly regional jets on non-metro routes or secondary routes, say industry analysts.
Embraer will have to contend with the Toulouse-based ATR, whose turboprops are used by airlines like Air Deccan, Jet Airways and Kingfisher Airlines on regional routes, and has positioned itself as the most the "most economically efficient" in its category, said Air Deccan CEO GR Gopinath in an earlier interview with HT.
Regional jets like ATR are very well adapted for feeder routes in India and can land on most airports in India where jets can't," Gopinath had told HT. What is interesting is that India has more than 400 airports, which can be connected by air; currently less than 100 are serviced by air despite the entry of new airlines.
ATR, which claims its turboprops are twice as fuel-efficient as jet aircraft, plans to sell 150 planes in India in the next five to six years, said its CEO Filippo Bagnato. It has already sold about 100 turboprops in India. Most of the new turboprop sales will be of 72-seater aircraft.
The company may also set up a research and development centre in India to utilise the skilled manpower in the country and co-produce planes parts here. "If in future, we have cost opportunities, we are ready to partner with anybody in India for making airplane parts," Bagnato said.
Low-fare airline Air Deccan, which is one of ATR?s biggest customers in India, plans to set up a cargo airline and wants convert five propeller planes it uses into cargo carriers.
It is also planning to buy or lease more freight carriers. ATR, which has set up a training centre in Bangalore with Air Deccan, plans to now set up a similar centre with another training centre with Kingfisher Airlines, it's other big customer in India, by the middle of 2008.