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

This article is based on an official press release from KLM.

KLM Cityhopper Increases Capacity on Embraer 195-E2 Fleet Through Galley Optimization

KLM Cityhopper (KLC) has officially commenced operations with its upgraded Embraer 195-E2 fleet, marking a strategic shift to increase capacity without compromising passenger legroom. On December 6, 2025, the first modified aircraft departed Amsterdam for Porto, Portugal, debuting a new configuration that adds four seats to the cabin.

According to the airline’s official announcement, the entire fleet of 22 Embraer 195-E2 aircraft will undergo this retrofit, increasing the seating capacity from 132 to 136. The project is scheduled for completion by June 2026. This initiative aligns with the carrier’s broader goals to maximize revenue per flight while simultaneously improving Sustainability metrics per passenger.

Optimizing Space Without Squeezing Passengers

A primary concern with cabin densification, often referred to in the industry as “up-gauging”, is the potential reduction of seat pitch (legroom). However, KLM Cityhopper has stated that the additional row of seats was made possible through the reconfiguration of service areas rather than the seating area itself.

The airline achieved the extra space by optimizing the galley (kitchen) layout. By reducing the physical footprint of the galley and refining stocking methods, KLC created enough room to install four additional seats. The aircraft continue to utilize Recaro BL3710 and SL3710 seats, maintaining the existing comfort standards associated with the E2 fleet.

“All 22 Embraer 195-E2s will be fitted with four additional seats in Economy Class. This enables KLM Cityhopper to carry more passengers and generate increased revenue.”

, KLM Corporate News

Weight Reduction and Efficiency

Beyond the addition of revenue-generating seats, the retrofit involves a significant overhaul of the onboard catering process. The new configuration is designed to be lighter, reducing the “dead weight” carried on each sector.

According to technical data released regarding the upgrade, the optimized catering process is projected to reduce the total catering weight across the fleet by approximately 5 million kilograms annually. This reduction in weight directly correlates to fuel efficiency. KLC estimates that these changes will save approximately 160,000 kilograms of jet fuel per year.

Sustainability Implications

The Embraer 195-E2 is already marketed as the most efficient aircraft in its class, offering a 63% reduction in noise and significantly lower fuel burn compared to the previous generation E190s. The densification of the cabin further enhances these environmental credentials on a per-passenger basis.

By spreading the fuel burn over 136 passengers instead of 132, and combining this with the weight savings from the galley, KLM reports that CO₂ emissions per passenger will decrease by 3%. This supports KLM’s “Fly Responsibly” campaign, which seeks to lower the environmental footprint of aviation through incremental operational improvements.

AirPro News Analysis

The Economics of Marginal Gains

In the high-volume, low-margin world of regional aviation, the addition of four seats represents a massive potential revenue upside. While four seats may seem negligible on a single flight, the cumulative effect across a fleet of 22 aircraft operating multiple sectors daily is substantial. If an aircraft flies four sectors a day, that is 16 additional revenue opportunities per plane, per day.

We view this move as a prime example of “smart densification.” Unlike low-cost carriers that often reduce pitch to the regulatory minimum to add rows, KLM Cityhopper has leveraged the often-underutilized galley space. This allows the airline to maintain its premium positioning and passenger experience while reaping the economic benefits of a higher-density cabin. It also standardizes the fleet configuration, simplifying operations at their Amsterdam Schiphol hub.

Sources

• KLM Corporate News