Brazil's TRIP to convert Embraer options and order ATR 72-600s

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Brazilian regional carrier TRIP Linhas Aereas is planning to place more orders later this year for Embraer 175s and ATR 72s.

TRIP president Jose Mario Caprioli dos Santos says the fast-growing carrier is planning to exercise six of its E-175 options by year-end and ink a new deal with ATR covering eight to 12 ATR 72-600s.

In June TRIP took delivery of the first three E-175s from its 2008 order for five firm aircraft, plus 10 options and 15 purchase rights.

"We want to exercise two batches [of three options] before the end of the year," Caprioli told ATI at the Low Cost Airlines World Americas 2009 conference.

He adds that the first batch of three will be delivered in the second half of 2010, and that TRIP eventually plans to operate a fleet of at least 30 E-175s by the end of 2013 - with all the options and purchase rights being converted in batches of three over the next few years.

 © Embraer

TRIP's business plan also envisions a fleet of 20-24 ATR 72-500/600s. The Campinas-based carrier currently operates 22 ATR turboprops consisting of 12 ATR 42-300s, four ATR 72-200s and six ATR 72-500s.

As part of earlier order with ATR, says Caprioli, TRIP is already committed to taking six more ATR 72-500s. He says three of these are scheduled to be delivered in the second half of this year and the final three in the first half of next year.

"We'll start negotiations with ATR for a new order [later this year]," he reveals. "We have demand for another eight or 12 ATR 72s in the next two to three years. We'd like the new order to be for the -600."

Caprioli says the -600s will mainly be replacement rather than growth aircraft as TRIP plans to transition its ATR fleet entirely to 72-500/600 models, adding that he does not mind operating -500s alongside -600s as the only major difference is the glass cockpit.

He says ATR has already agreed to take back three of TRIP's 12 ATR 42s as part of its earlier purchase of six ATR 72-500s. Of the remaining nine, he says, most are leased and will be returned as their leases expire while the others will be sold or returned to ATR as part of its new order for ATR 72-600s.

Caprioli says two of its four ATR 72-200s are also leased and will be returned when their leases expired. The other two will be sold or returned to the manufacturer as part of the new ATR 72-600 order.

TRIP, which previously operated an all-turboprop fleet, was initially planning to begin taking E-175 jets early this year. But the initial deliveries were delayed by a few months due to trouble securing financing.

A deal was eventually concluded with Brazilian development bank BNDES, which agreed to finance all five of the firm E-175s in the original order. As a result of the delay in securing financing, TRIP's first three aircraft were all delivered in quick succession in June.

"All the deliveries were together but that wasn't a problem for us because July is the peak season for us and the second half is better than the first half," Caprioli says.

The fourth E-175 from the five-aircraft order is scheduled to be delivered in October and the fifth early next year.

Caprioli says TRIP is using half its new E-175s to upgrade routes which were previously operated with ATR 72s, and half to open new routes. Response to the new routes, he says, has been excellent, with 20% higher bookings than TRIP normally experiences for new services. "There's been a much higher maturation rate," he says.

Several of the new routes being launched, including some from Rio de Janeiro Santos Dumont Airport, connect major Brazilian cities. Caprioli says TRIP historically has not operated on domestic trunk routes but, with the E-175, it believes it can compete with larger carriers as Brazilian business travellers tend to prefer the Embraer jet family.

While TRIP will use the E-175 to drive most of its growth, Caprioli says the carrier still need turborpops because 20% of its routes are exclusive, mainly in the Amazon region to airports that cannot accommodate jets.

He says TRIP will also continue to use turboprops on some routes where it competes against other regional carriers but he believes TRIP will have an advantage because it will be operating more modern models than its competitors.