The Naresh Goyal-promoted private airline Jet Airways may phase out Bombardier airplanes from the fleet of JetLite (formerly Air Sahara) and replace them with Brazilian Embraer airplanes.

JetLite, which was acquired by Jet Airways [Get Quote] for Rs 1,450 crore, is operating three of its seven Canadian-built Bombardier airplanes. JetLite has a total 24 aircraft, including Boeing B737s.

Highly placed sources said Jet Airways would not renew the lease agreement signed with the lessors and instead induct Embraer airplanes.

"Jet Airways is in talks with Embraer for possible cooperation," they said.

Chennai-based Paramount Airways is the only airline flying civilian Embraer planes in India at present.

Jet Airways executive vice president (marketing & sales), Anita Goyal, told Business Standard: "We are in talks with Embraer and we would like to associate with them. But there are no plans to phase out Bombardiers."

Embraer planes are regional jets with a capacity of between 50 and 90 seats. Besides Bombardier, the ATR turboprop is the other leading regional airplane being operated in the Indian market.

"Getting Embraer in the JetLite fleet is part of the rebranding of Air Sahara, to position it as a strong domestic carrier, offering better regional connectivity," the sources said.

Jet Airways has already discontinued JetLite flights that were running up losses, as a part of its network rationalisation exercise. It plans to get all 24 aircraft in the fleet airworthy by October 2007.

"Jet has withdrawn its business class services from JetLite flights. Yields have been consistently improving with better management of fares and seat factor, which was at 74 per cent in the first quarter of fiscal 2008," a Jet executive said.

"Significantly, the unit costs have been reduced by 15 per cent as a result of renegotiation of contracts including lease, catering, insurance and reduction in employees from 4,500 to 2,100," the executive said.