Prior to its collapse in 2017, Air Costa had an order for 50 Embraer E2s with options for a further 50. The order made the regional carrier the first customer for the E2s in India and looked to boost the plane’s fortunes. So what happened to the E2 order?
Air Costa started flying in September 2013 from its base in Chennai using a modest fleet of two ERJ-170s. To further expand its fleet, Air Costa opted to place a huge order with Embraer and become the first Asian customer for the E2 family.
The order became official in early 2014 at the Singapore Airshow. Air Costa purchased 50 E2 jets, with a mix of the E190-E2 and E195-E2s, along with purchase rights for another 50. The order was a huge boost to the new E2 program, which had found its first Asian customer and grown orders by over 30%.
Deliveries for the first E190 were scheduled for sometime in 2018, while the larger E195 coming into service a year later, according to AviationPros. There was much excitement for the order at the time, with the airline’s chairman saying,
“Regional air services have enormous potential in India, especially the ones connecting tier one, two and three cities. Our initial experience with our current E-Jets has been very positive. Our passengers have complimented the aircraft on its comfort and point-to-point convenience. The E2s will give us right-sized seat capacity for us to cater to the future target markets and unit costs that are competitive with larger re-engined single aisle aircraft.”
When placing its order, Air Costa flew a fleet of four aircraft, comprised of two ERJ-170s and two ERJ-190s. The airline largely stuck to regional services from its bases in Chennai and Vijaywada, flying to Tier 2 destinations nearby. Destinations included Tirupati, Coimbatore, Vishakapatnam, and more.
However, Air Costa wanted to further its reach and applied to become a national airline in 2015. The approval let the carrier add flights in the north of India as well, with cities like Jaipur and Ahmedabad in the network. Despite these moves, the airline still only flew five aircraft by 2016 and hoped the E2 would fill the gap.
However, Air Costa had mounting financial issues as well. According to Economic Times, the airline had racked up losses of nearly ₹100 crores ($13.3mn) in 2015 and was struggling with cancelations. By early 2017, Air Costa had to suspend operations and later shut down after its flying license was revoked.
On the books
Despite Air Costa’s collapse in 2017, the 50 jet order remained on Embraer’s books into 2018. According to Financial Express, Embraer was holding out hope that Air Costa would recover in 2018 and take up its order.
However, as time passed and it became clear that this would not be a reality, Embraer canceled the order and removed it from the backlog. Currently, Embraer only has a backlog of 175 E2 family aircraft, down from 200 at the start of 2014 with Air Costa.