Avelo Airlines Orders 100 Embraer E195-E2 Jets in Historic Deal

Introduction

On September 10, 2025, Avelo Airlines made headlines by announcing an Orders for up to 100 Embraer E195-E2 aircraft, a deal valued at $4.4 billion at list prices. This transaction is not only the largest fleet commitment in Avelo’s history but also marks the first time a U.S. airline has ordered Embraer’s most advanced commercial jet. The move signals a strategic evolution for both Avelo and Embraer, reflecting broader shifts in the regional aviation market and the ultra-low-cost carrier (ULCC) segment.

The significance of this order extends beyond its financial magnitude. It reflects Avelo’s response to evolving market pressures, changing consumer expectations, and the need for operational flexibility. For Embraer, the deal represents a long-awaited breakthrough into the U.S. market with its next-generation E2 series, a milestone that could influence future fleet decisions across North America.

This article examines the details of the Avelo-Embraer agreement, explores the strategic context for both companies, and analyzes the implications for U.S. regional aviation. We draw on official statements, industry analysis, and available data to provide a balanced, fact-based perspective on this transformative development.

The Historic Aircraft Order and Its Strategic Context

Avelo Airlines’ order comprises 50 firm Embraer E195-E2 aircraft, with options for 50 more. Deliveries are set to begin in the first half of 2027 and continue through 2032. While the deal’s $4.4 billion list price is headline-grabbing, it is industry standard for airlines to negotiate substantial discounts, especially for large orders. The purchase rights structure allows Avelo to scale its fleet based on market conditions, providing both growth potential and financial flexibility.

This order is particularly significant because it makes Avelo the first U.S. airline to select the E195-E2. Embraer has sold nearly 800 first-generation E-Jets to U.S. operators, but until now, the E2 series had not found a launch customer in the United States. Embraer executives have highlighted the importance of demonstrating the E195-E2’s capabilities in the U.S. market, which could open the door to further sales.

The timing of the announcement coincides with a major capital raise by Avelo, signaling investor confidence in the airline’s strategy. Industry sources report that Embraer itself may have participated in the funding round, though this has not been officially confirmed. This type of manufacturer-operator Partnerships, if accurate, would represent a deeper alignment of interests than traditional supplier-customer relationships.

“Bringing our best aircraft into the U.S. to show the broader market how capable this is could potentially attract additional American carriers to the E2 platform.” , Arjan Meijer, Embraer Commercial Aviation President and CEO

Why the E195-E2? Avelo’s Selection Process

Avelo CEO Andrew Levy has stated that the airline considered the Airbus A220 but ultimately selected the E195-E2 based on its operational needs. He described the ideal aircraft as “a new version of the MD-80 that can fly 4-5 hours, and 2X2 seating over 3 X 2,” emphasizing passenger comfort and flexibility. The E195-E2’s 2×2 cabin eliminates middle seats, a feature that stands out in the ULCC segment.

The E195-E2’s advanced technology and efficiency also played a role. With Pratt & Whitney PW1000G geared turbofan engines and Embraer’s Enhanced Takeoff System (E2TS), the aircraft offers up to 20% improved fuel efficiency compared to previous-generation E-Jets. This supports Avelo’s goal of cost-effective operations while enabling access to airports with shorter runways.

The phased delivery schedule allows Avelo to integrate the new aircraft gradually, reducing operational risk and aligning fleet growth with market demand. The plan is to retire the airline’s eight Boeing 737-700s as E195-E2s arrive, while maintaining and potentially expanding its 737-800 fleet for higher-density routes.

Avelo Airlines: Transformation and Growth Strategy

Avelo’s journey from its roots as Casino Express Airlines in 1987 to its current incarnation as a disruptive ULCC is notable. Under the leadership of Andrew Levy, who has held senior roles at Allegiant and United Airlines, Avelo shifted from charter services to scheduled operations, launching its first flight in April 2021.

The airline’s strategy focuses on underserved routes and secondary airports, following a point-to-point model reminiscent of Allegiant’s approach. Initial operations centered on the West Coast, but Avelo quickly expanded to the East Coast with a major base at Tweed New Haven Airport, Connecticut. By the end of 2024, New Haven had become Avelo’s largest base, serving 26 destinations, primarily leisure markets.

As of mid-2025, Avelo serves 47 destinations across 18 states and Puerto Rico, plus three international markets, with a fleet of 22 Boeing 737s. The Airlines claims industry-leading on-time performance and reliability. However, the ULCC sector’s volatility has led to strategic adjustments, such as the decision in July 2024 to exit West Coast operations and discontinue service to 10 cities.

“We believe we can run twin fleets well, though it does add complexity. The 2027 delivery timeline gives us time to prepare.” , Andrew Levy, Avelo CEO

Financial Performance and Market Position

Avelo’s financial performance has improved through 2025, with the airline reporting four profitable months out of the last five. The company closed 2024 near break-even, a notable achievement in a challenging environment for ULCCs. The first quarter of 2025 saw a $13.7 million operating loss, attributed to increased competition in core markets, particularly Connecticut, but subsequent route adjustments led to a turnaround.

The recent capital raise, described as the largest since Avelo’s Series A round, provides the financial foundation to support pre-delivery payments and fleet expansion. While the amount remains undisclosed, the timing and investor participation (potentially including Embraer) indicate robust support for the airline’s growth strategy.

Avelo’s plans to launch a loyalty program and co-branded credit card later in 2025 reflect efforts to diversify revenue streams and strengthen customer retention, key factors for sustainable profitability in the ULCC segment.

The Embraer E195-E2: Technology and Market Impact

The E195-E2 is the largest and most advanced member of Embraer’s E-Jet family. It seats 120-146 passengers, depending on configuration, and boasts a range of up to 3,000 nautical miles. The aircraft features high-aspect ratio wings, advanced aerodynamics, and Pratt & Whitney PW1000G engines, resulting in double-digit reductions in fuel burn compared to earlier models.

The Enhanced Takeoff System (E2TS) is a key differentiator, enabling operations from runways as short as 4,000 feet. This opens up approximately 500 U.S. airports to jet service, many of which were previously limited to turboprops or inaccessible to larger jets. For Avelo, this capability is a game-changer, allowing entry into markets like Key West, Florida, and various mountain or resort destinations.

Sources

• Embraer