Air One to offer feeder routes with Embraer jets

Air One, a feeder airline, plans to connect up tier II cities using some 25 Embraer ERJ 145 family aircraft, J W Lobo, the air operator's chairman and managing director told reporters here on Tuesday.

The airline will start with two used 50 seat jet aircraft, dry leased from Swiss International, to be delivered in August and September, Lobo said.

Subsequent aircraft will be new and will be bought outright, over a five year period. By mid 2007, "we aim to have five 50 and 70 seat aircraft."

Air One was targetting revenues of Rs 72 crore in its first year of operation with direct flights connecting cities such as Thiruvananthapuram, Bhubaneswar, Pune and Vizag.

Actual routes and schedules will, however, be announced "45 days before we start flying" Lobo said. The airline aims to offer fares between a fifth and a third lower than competitors by making up its margins through volumes.

"There are cities which are not connected by direct flights, and we expect there will be enough passengers for us to do business profitably" he said.

The aircraft supplier, Brazil's Embraer, will "support Air One with significant enhancement of our infrastructure to deliver spares and maintenance" J Bruce Peddle, managing director of Embraer's civil aircraft market in the Asia Pacific said.

Rolls Royce, which has supplied the engines for the aircraft, will maintain the engines for Air One. The airline was leasing the first two aircraft at $135,000 a month per aircraft, Lobo said.

"By outsourcing maintenance, in a way, to the original suppliers themselves of the aircraft and the engine, we find a cost advantage." He didn't put a value to it though.

Air One has invested some Rs 32 crore in the first two aircraft and related operations. It has investors from Bangalore, Mangalore and "some non-resident Indians". Of this, Rs 20 crore was equity and Rs 12 crore debt, from financial institutions, he said.