This article summarizes reporting by Bloomberg and journalists Mihir Mishra and Siddharth Philip. And publicly available datas.

Star Air in Talks for $1 Billion Embraer Fleet Expansion

Star Air, recognized as India’s largest private regional carrier, is reportedly in advanced discussions to acquire up to 20 aircraft from Brazilian aerospace manufacturer Embraer SA. According to reporting by Bloomberg, the potential deal is valued at approximately $1 billion based on list prices, marking a significant potential breakthrough for Embraer in the competitive Indian aviation market.

If finalized, this acquisition would represent the first direct commercial order for Embraer’s new E2 generation jets by an Indian airline. The move signals a strategic shift for Star Air, which currently operates a fleet of leased Embraer aircraft, toward asset ownership and long-term capacity expansion.

Details of the Proposed Acquisition

According to sources familiar with the matter cited by Bloomberg, the negotiations center on the Embraer E-Jet E2 family, specifically the E195-E2 or E190-E2 models. These aircraft are designed to bridge the gap between smaller turboprops and larger narrowbody jets like the Airbus A320, offering capacity for up to 146 passengers.

Deal Structure and Timeline

Industry reports indicate the deal is likely structured to include:

• Total Units: Up to 20 aircraft.
• Order Split: A probable mix of 10 firm orders and 10 options to be exercised at a later date.
• Valuation: Estimated at $1 billion at list prices, though airlines typically negotiate significant discounts for bulk orders.
• Delivery: Deliveries are projected to commence in the fiscal year ending March 2028.

This potential order aligns with Star Air’s broader “Vision 2030” strategy. As reported by the Economic Times and other outlets in November 2025, the airline aims to expand its fleet to 50 aircraft by the end of the decade. Currently, the carrier operates an all-Embraer fleet consisting of 50-seater ERJ 145s and dual-class E175s.

Financial Backing and Strategic Context

The scale of this acquisition requires substantial capital, and Star Air has been actively strengthening its balance sheet to support such expansion. The airline is the aviation arm of the Sanjay Ghodawat Group (SGG), a diversified conglomerate with interests ranging from consumer products to energy.

In November 2025, Star Air successfully raised INR 150 crore (approximately $18 million) in a Series B funding round. This round attracted marquee investors, including Micro Labs Ltd and Deepak Agarwal. Furthermore, the airline has indicated plans to raise an additional INR 200 crore by the 2026-27 fiscal year to fund pre-delivery payments and operational scaling.

Embraer’s Push into India

For Embraer, securing a firm order from Star Air would be a critical validation of its “Profit Hunter” marketing campaign in South Asia. While the manufacturer supplies aircraft to the Indian Air Force and the Border Security Force, it has historically struggled to break the commercial duopoly held by Airbus and Boeing in the region.

To address this, Embraer opened a new corporate office in New Delhi in October 2025. This localized presence appears to be yielding results, as the manufacturer positions the E2 jet as the ideal solution for India’s regional connectivity scheme, UDAN (Ude Desh ka Aam Nagarik).

AirPro News Analysis

The Case for “Right-Sizing” in Indian Aviation

At AirPro News, we view this potential transaction as a pivotal moment for the concept of “right-sizing” in the Indian market. For years, Indian carriers have relied heavily on 180-seat Airbus A320s or Boeing 737s. While efficient on trunk routes (e.g., Delhi to Mumbai), these aircraft are often too large to operate profitably on thinner regional routes connecting Tier-2 and Tier-3 cities.

Conversely, turboprops like the ATR-72 are efficient but slower and lack the range for longer regional sectors. The Embraer E2 family sits in the middle, offering jet speeds and ranges with a seat capacity (100–146) that lowers the financial risk per flight. If Star Air proceeds with this order, it validates the business case that profitability in India is not solely about filling the largest possible plane, but about matching capacity to demand.

Frequently Asked Questions

What is the value of the Star Air and Embraer deal?

The deal is estimated to be worth approximately $1 billion based on list prices, though final transaction prices are usually lower.

Which aircraft is Star Air buying?

The airline is considering the Embraer E-Jet E2 family, likely the E195-E2 or E190-E2 models.

When will the new aircraft be delivered?

Deliveries are expected to begin in the fiscal year ending March 2028.

Is Star Air a public company?

No, Star Air is a private regional carrier and part of the Sanjay Ghodawat Group. However, it has raised external capital through Series B funding.

Sources

• Bloomberg
• The Economic Times
• Embraer

This article is based on an official press release from Falko Regional Aircraft Limited.

Falko Enters Japanese Market with First Regional Aircraft Sale via JOL Structure

Falko Regional Aircraft Limited (Falko), the world’s largest asset manager focused exclusively on the regional aircraft sector, has officially closed its first aircraft sale in the Japanese market. Announced on December 15, 2025, the transaction involves the sale of a Bombardier CRJ900 regional jet to a Japanese investor. The deal was structured as a Japanese Operating Lease (JOL), marking a significant expansion for Falko into a region traditionally dominated by larger narrowbody and widebody investments.

According to the company’s announcement, the transaction was executed in partnership with iStrings Aviation Capital Co., Ltd., a Tokyo-based aviation asset manager and subsidiary of Marubeni Corporation. This collaboration highlights a strategic push to introduce regional aviation assets to Japanese corporate investors, who have historically favored “liquid” assets such as the Boeing 737 or Airbus A320 families.

Transaction Structure and Strategic Partners

The sale utilizes the Japanese Operating Lease (JOL) structure, a financing mechanism widely used by Japanese corporate investors, often Small and Medium Enterprises (SMEs), to defer taxes by writing off asset depreciation against corporate profits. While JOL transactions are common in the aviation finance world, they are rarely applied to regional jets like the CRJ900.

Falko stated that iStrings Aviation Capital acted as the arranger for the deal, bridging the gap between the UK-based lessor and the Japanese investor base. iStrings, wholly owned by the major trading house Marubeni Corporation, specializes in arranging JOL and JOLCO (Japanese Operating Lease with Call Option) transactions.

Hirotoshi Takezoe, Director at iStrings Aviation Capital, commented on the evolving market dynamics in the press release:

“While regional jets have had a limited presence in the JOL space, we are now seeing growing investor interest as the market expands and the investor base diversifies.”

Market Context: A Shift Toward Regional Assets

The Japanese aviation finance market is mature, hosting major global players and significant capital. However, the entry of a dedicated regional aircraft lessor signals a shift in investor sentiment. Regional jets, which typically seat between 50 and 150 passengers, offer a lower capital entry point compared to standard narrowbody aircraft. This “smaller ticket” size allows a broader range of corporate investors to participate in aviation leasing without the massive capital outlay required for larger jets.

Brian Foley, Head of Portfolio Strategy at Falko, emphasized this alignment in the company’s statement:

“The ticket size for used E-Jet, CRJ and A220 aircraft types aligns well with the preferences of Japanese investors, and so we anticipate continued momentum and increased activity in the 50-150 seat aircraft segment.”

AirPro News Analysis

The successful closure of this CRJ900 deal suggests that the Japanese Operating Lease market is undergoing a period of diversification. For decades, the JOL market has been a stronghold for Airbus and Boeing narrowbodies due to their perceived liquidity and standardized value retention. Falko’s ability to close a deal on a regional asset indicates that Japanese investors are becoming more sophisticated, seeking yield and tax benefits in asset classes that were previously considered niche.

Furthermore, this transaction comes approximately one year after Falko’s acquisition by HPS Investment Partners, LLC, which was completed in December 2024. The move into Japan likely represents a strategic initiative under the new ownership to tap into Asian capital markets, diversifying Falko’s funding sources beyond its traditional western bases.

Corporate Background

Falko Regional Aircraft Limited is headquartered in Hatfield, United Kingdom, and manages a portfolio of approximately 226 aircraft leased to 39 customers globally as of late 2024. The company specializes in the 70–150 seat segment, a critical component of the global aviation network that connects secondary cities to major hubs.

The deal also reinforces the role of iStrings Aviation Capital as a key intermediary in Tokyo. By facilitating the entry of specialized lessors like Falko, iStrings is effectively broadening the menu of available assets for Japanese corporate investors, moving beyond the commoditized narrowbody market.

Sources

• Falko Regional Aircraft Limited

IATA Reports $1.2 Billion in Blocked Airline Funds; Algeria Emerges as Top Concern

The International Air Transport Association (IATA) announced on December 10, 2025, that the total amount of Airlines funds blocked by governments worldwide stands at $1.2 billion. While this figure represents a decrease from the $1.7 billion reported in October 2024, the association warns that the crisis has become heavily concentrated in specific regions, posing a significant threat to connectivity.

According to the latest data released by IATA, 93% of these blocked funds are currently trapped in African and Middle Eastern countries. The inability of airlines to repatriate revenues from ticket sales, cargo, and other activities threatens the financial viability of routes into these markets. The report highlights a shifting landscape where previous offenders like Nigeria have cleared backlogs, only to be replaced by new bottlenecks in nations such as Algeria.

Regional Concentration and Top Offenders

The IATA report details a concerning trend where, despite a global reduction in blocked funds over the last 18 months, specific markets are seeing conditions deteriorate. As of October 2025, the top five countries or regions accounting for the majority of blocked funds are:

• Algeria: $307 million
• XAF Zone (Central African states): $179 million
• Lebanon: $138 million
• Mozambique: $91 million
• Angola: $81 million

The Rise of Administrative Hurdles in Algeria

For the first time, Algeria has topped the list of countries blocking airline funds. IATA attributes the accumulation of $307 million primarily to complex new approval requirements introduced by the Algerian Ministry of Trade. These administrative barriers effectively freeze airline revenues, complicating operations for international carriers serving the market.

Persistent Issues in the XAF Zone

The XAF Zone, which includes Cameroon, the Central African Republic, Chad, the Republic of the Congo, Equatorial Guinea, and Gabon, remains the second-largest holder of blocked funds at $179 million. According to IATA, the primary cause is bureaucratic delays at the Bank of Central African States (BEAC), which enforces a slow validation process for outgoing payments.

Economic Implications and Industry Reaction

The blockage of funds is not merely an accounting issue for carriers; it represents a macroeconomic threat to the nations involved. IATA data indicates that the aviation sector contributes approximately $75 billion to African GDP annually and supports roughly 8.1 million jobs across the continent. When airlines cannot access their revenues, they are often forced to reduce flight frequencies, use smaller aircraft with less cargo capacity, or suspend routes entirely.

Willie Walsh, the Director General of IATA, emphasized the necessity of reliable financial flows for the industry:

“Airlines need reliable access to their revenues in U.S. dollars to keep operations running… Governments have committed to unfettered repatriation of funds in bilateral agreements. It is also in the interest of governments to foster the economic catalyst that airlines provide.”

, Willie Walsh, Director General, IATA

A Success Story in Nigeria

In a positive development, the report notes that Nigeria has successfully cleared 98% of its backlog. Previously the world’s worst offender with nearly $850 million blocked in 2023 and 2024, Nigeria’s turnaround demonstrates that government engagement and policy reform can effectively resolve repatriation crises.

AirPro News Analysis

The shift in the epicenter of blocked funds from Nigeria to Algeria highlights a “Whac-A-Mole” dynamic in global aviation finance. While the total volume of blocked cash has decreased, the underlying friction between protecting foreign reserves and maintaining global connectivity persists.

We observe a critical distinction in the causes of these blockages. In countries like Lebanon ($138 million blocked), the issue is driven by a severe, ongoing economic crisis and genuine shortages of foreign exchange. In contrast, the situation in Algeria appears to be driven by administrative policy choices rather than pure insolvency. This distinction is vital for airlines; while economic crises are difficult to navigate, administrative hurdles are often viewed as violations of bilateral air service agreements, potentially leading to faster retaliatory measures such as capacity cuts.

Frequently Asked Questions

What are blocked airline funds?
Blocked funds refer to revenue generated by airlines in a foreign country (from ticket sales, cargo, etc.) that the local government prevents from being transferred back to the airline’s home country, usually due to foreign currency shortages or administrative controls.

Why has Algeria become the top offender?
Algeria has risen to the top of the list due to new, complex approval requirements from its Ministry of Trade, which have created significant administrative delays in repatriating funds.

How much money is currently blocked globally?
As of October 2025, IATA reports that $1.2 billion is blocked globally, with the vast majority located in Africa and the Middle East.

Sources: IATA