Avelo Airlines has just placed a massive aircraft order, for a plane that no other US airline has ordered. This is pretty exciting, if you ask me!
Avelo Airlines renews fleet with up to 100 Embraer jets
Avelo has placed an order for up to 100 Embraer E195-E2s, including 50 firm orders and 50 options. The first new Embraer jet delivery is expected for the first half of 2027, so that’s less than two years away. The deal is valued at up to $4.4 billion at list prices (excluding purchase rights), but airlines never pay list prices.
Avelo will be the first US airline to operate this aircraft. For those not familiar with the Embraer E195-E2, this is the latest generation jet of the Brazilian aircraft manufacturer’s lineup. The E195-E2 is the largest, longest range, and most fuel efficient Embraer E-jet. The plane can seat 120-146 people (depending on the configuration), and can fly up to 2,600 nautical miles. The plane is great from a passenger experience standpoint, given the 2-2 layout, meaning there are no middle seats onboard.
The new Embraer aircraft are intended to modernize Avelo’s fleet, complementing existing Boeing 737s for the foreseeable future, while improving cost efficiency and network reach. For context, Avelo’s fleet currently consists of nearly two dozen Boeing 737s (-700s and -800s), which are an average of over 17 years old.
The airline notes how the plane’s excellent short field performance is a key capability that will open new markets for Avelo, and drive efficiency in many of Avelo’s existing airports. Here’s how CEO Andrew Levy describes this:
“We are thrilled to partner with Embraer and bring this best-in-class small narrowbody airplane to the United States marketplace. Our customers will love the E2’s comfortable 2×2 seating, in-seat power ports, large overhead bins, and quiet cabin. The aircraft’s exceptional performance, size, and efficiency make it the perfect choice for the future growth of our scheduled service network. The airline industry in the United States is evolving, and the E2 fits perfectly with our vision for Avelo’s unique role in that evolution.”
My take on Avelo Airlines’ major fleet renewal project
It’s funny that just yesterday, JetBlue retired its last Embraer E190, and I noted how no US airline flies the E190-E2 or E195-E2, despite them being great planes. Then today, Avelo announced an order for up to 100 of these planes. They must’ve read my post and decided to place an order (I kid, of course, in case that’s not obvious). 😉
On balance, this seems like a great fit for Avelo. Here in North America, Canada’s Porter Airlines is another carrier that operates a bunch of E195-E2s, which are configured with 132 seats (16 of which are premium, and 20 of which feature extra legroom). The carrier has built most of its network around these planes, though in fairness, not much is known about Porter’s finances.
Avelo’s existing planes have anywhere from 149 to 189 seats, so these Embraer aircraft will represent a bit of a capacity reduction. That’s probably actually helpful for the carrier, given the bases it tries to set up in smaller markets.
The Embraer E195-E2 has fantastic operating costs, so Avelo will benefit from that. That being said, the acquisition costs are much higher for these brand new planes than for the used Boeing 737s that the carrier picked up.
So I think this fleet renewal makes about as much sense as it possibly could. Perhaps my bigger concern with Avelo is the overall sustainability of the business model, given how the airline industry in the United States has evolved. Profits are so heavily consolidated among a few airlines, and it’s hard for smaller, independent carriers to get by.
For example, Avelo recently got into the deportation flight business, simply to improve its prospects. As the CEO explained at the time:
“Having a portion of our company dedicated to charter flying, without exposure to fluctuating fuel prices or risk from macroeconomic factors, provides us with the stability to grow our core business, which is scheduled passenger travel.”
How will buying billions of dollars in new planes impact Avelo’s bottom line? The planes aren’t cheap to own (compared to old 737s), so one certainly wonders how this plays out in the long run.
Bottom line
Avelo Airlines has placed an order for up to 100 Embraer E195-E2s, which includes 50 firm orders and 50 options. The airline will take delivery of these starting in the first half of 2027, and presumably the long term plan is to replace the aging Boeing 737s with these planes.
I’m happy to see that the Embraer E195-E2 will be flying for a US carrier, as it’s a great plane, given the comfortable cabin and lack of middle seats. I’m still not totally sold on Avelo’s prospects of success, given the state of the industry, but that’s a different story…
What do you make of Avelo ordering the Embraer E195-E2?
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