Avelo Airlines to buy 50 E2 jets from Brazil plane maker Embraer

Brazilian airplane maker Embraer has landed its first U.S. sale of its efficient but slow-selling E2 jets with a 50-plane deal from startup carrier Avelo Airlines.

Avelo first started flying in April 2021 with used Boeing 737s but has struggled and recently exited a host of cities on the West Coast. It has also turned to flying deportees for U.S. Immigration and Customs Enforcement, which has sparked protests, demonstrations and backlash from some politicians.

The low-cost airline focuses on smaller cities, with a large operation out of Connecticut. On Monday, without providing a figure or an investor, Avelo announced it won the “single largest investment” since the carrier launched and said the money will be used to grow and improve customer experience. The new Embraer jets, scheduled to start arriving in the first half of 2027, represent big growth for Avelo, which has just 22 Boeing planes now, according to its website.

Avelo said the order for 50 E195-E2 planes, with options for 50 more, will help it modernize its fleet. The airline is betting that the planes’ two-by-two seating configuration and quieter cabins compared with older jets will be a hit with customers.

While dwarfed by major U.S. plane maker Boeing and rival Airbus, Embraer is known for building regional jets that airlines rely on for thousands of flights a day for shorter routes or to smaller cities. It has also been solidly profitable for two years, while Boeing, which terminated a more than $4 billion tie-up with Embraer as it dealt with several crises, has struggled.

Despite its solid footing, Embaer’s newer, more fuel-efficient E2 jets have been outsold by similarly sized aircraft like the Airbus A220 family.

The E195-E2, the largest in that family, can seat 132 people in a single-class cabin with 31-inch seat pitch (a measure of the distance from one seat to the one behind it) or 120 people in a three-class cabin.

“The aircraft’s exceptional performance, size, and efficiency make it the perfect choice for the future growth of our scheduled service network,” said Avelo CEO Andrew Levy, former United Airlines CFO, in a news release.

The airline’s used Boeings can seat up to 189 passengers, but too much capacity can drive down fares. Struggling budget carrier Spirit Airlines, for example, lists Airbus A321Neos, with 229 seats.

One challenge with smaller jets for bigger airlines has been that the “majors regard them as a fleet complication,” said Richard Aboulafia, managing director at AeroDynamic Advisory, an industry consulting firm, since they would have to train pilots, acquire simulators and put up other costs to add to their lineups.

“The E2 has terrific economics but airlines have an irrational obsession for range they don’t need,” Aboulafia said.

Avelo’s order is worth $4.4 billion at list prices, the airline said, but that is before usual discounts. Slower-selling planes or big orders often come with significant price cuts.