India's Fly91 orders 40 ATR turboprops in bet on smaller cities

NEW DELHI: Indian regional airline Fly91 on Thursday placed a firm order for 40 ATR 72-600 turboprops, one of the largest single orders ever for the Franco-Italian planemaker, as the carrier bets on demand from smaller Indian cities.

The order is a major boost for ATR, which dominates the turboprop market but relies on a relatively small number of countries for sales. It also highlights India’s emergence as a key growth market for regional aircraft as the government funds air links to smaller cities.

The deal is worth about $1 billion at list prices, though Chief Executive Manoj Chacko said Fly91 had secured an undisclosed discount, as is typical for large aircraft orders. Reuters reported earlier this week that the carrier was close to ordering at least 20 ATR turboprops.

Chacko told Reuters the first aircraft would be delivered in the second half of 2027, with all 40 arriving by 2032 or early 2033.

The airline, which currently operates six ATR 72-600s, plans to lease another six to eight aircraft from the open market before then, taking its fleet to 12 to 14 by late next year.

“India’s air connectivity is so under-penetrated, it’s not funny,” Chacko said, adding that narrowbody planes serve only about 70 of the country’s more than 160 functional airports.

India’s Fly91 close to ordering at least 20 ATR turboprops, sources say

He said Fly91 expects to have about 60 aircraft by the time deliveries from the order are completed.

That expansion will test an airline that has yet to turn an annual profit in a market where several regional carriers have failed and many routes launched under India’s regional subsidy scheme since 2017 have been discontinued.

Turboprops are cheaper to run than jets on short routes and can operate from shorter runways, giving airlines access to smaller airports and routes unsuited to narrow body aircraft such as the Airbus A320 or Boeing 737 MAX.

Financing for the order has yet to be finalised. Chacko said Fly91 was in talks with lessors and financiers and was funding upfront payments from its own resources. He described the sums involved as significant but declined to provide figures.

The airline has raised $26.3 million and is seeking a further $26.3 million, of which a quarter has already been subscribed by existing investors, Chacko said.

Fly91 is debt free and expects to reach cash break-even by the end of this financial year and to break even on a profit-and-loss basis a year later, he said.

Of its roughly 280 weekly flights, 98 receive viability gap funding covering half the seats under India’s regional connectivity scheme, worth roughly $1.16 million a month, Chacko said.