Avelo orders up to 100 Embraer E195-E2s; will be first US airline to fly the type
September 10, 2025
Avelo has placed a firm order for 50 Embraer E195-E2s with purchase rights for a further 50, a transaction valued at $4.4 billion at list prices (purchase rights excluded).
Deliveries are scheduled to begin in the first half of 2027, with executives indicating the stream runs through 2032.
The airline says the E2s will complement its Boeing 737NGs initially, with performance benefits that open up short-runway and constrained airports.
With this order, Avelo is set to become the first US airline to fly Embraer’s new narrowbody. Porter Airlines was the first airline in North America to fly the E2.
Avelo’s CEO, Andrew Levy, said the E2’s “exceptional performance, size, and efficiency” fit the carrier’s growth plans, while Embraer’s Arjan Meijer framed the deal as a long-awaited US breakthrough that could spur additional interest once the aircraft is flying in American colours.
Avelo’s Embraer order follows a significant capital raise
Two days before unveiling the Embraer deal, Avelo closed a new round of growth capital.
\While the airline did not disclose the amount, it described the financing as its largest investment since the Series A, from a new partner, and said proceeds will fund scheduled-service growth, targeted technology investments and customer-experience upgrades.
Avelo also flagged improving core margins, stronger liquidity, and plans to launch a loyalty programme and co-branded credit card later this year.
Given the proximity of the announcements and the typical need for pre-delivery payments (PDPs) on large fleet orders, the raise plausibly strengthens Avelo’s balance sheet for the 2027–2032 E2 delivery stream.
Fleet fit: Why E2s next to older 737s makes strategic sense
Avelo’s current fleet is Boeing 737-700s and 737-800s (22 aircraft as of its latest disclosure). The NGs have underpinned Avelo’s model of point-to-point services from secondary airports such as Tweed New Haven, leveraging low costs and limited incumbent competition.
The 737-800’s higher seat count helps on thicker leisure routes; the -700 has given Avelo some flexibility where demand is smaller or runways are tighter.
Bringing in the E195-E2 extends that playbook. Compared with a 737-800, the E2’s smaller gauge and short-field performance should let Avelo right-size capacity, sustain higher frequency without over-seating markets, and enter airfields where 737 economics or runway length are marginal.
Avelo explicitly notes that the E2 will open airports with sub-5,000-ft runways and complement, then over time replace, parts of the 737 flying—consistent with a dual-fleet transition that preserves network breadth while improving unit costs on thinner sectors.
Operationally, the trade-offs are manageable for a ULCC with concentrated bases:
- Economics: New-tech engines and aerodynamics reduce fuel and maintenance cost per trip—useful on short-stage-length, low-yield markets.
- Network reach: E2TS and lower noise open curfew- and runway-constrained opportunities where community impact matters.
- Product: A 2-2 cabin (no middle seat) is a consumer-friendly differentiator without undermining the ULCC à-la-carte model.
- Complexity: Introducing a second type brings training and spares overhead; however, the 2027+ ramp gives time to stage crews, MRO, and inventory. These costs are often outweighed if the aircraft unlocks new, profitable city pairs.
Ultimately, the E195-E2 order gives Avelo a scalable, right-sized tool to deepen its small-city strategy and push into runway-limited airports, while the new capital improves flexibility to fund PDPs and network growth ahead of first deliveries.
If execution matches the plan, the E2s should enhance route economics and smooth demand risk alongside the 737NGs.
