In a bold move that could reshape the U.S. low-cost airline landscape, Avelo Airlines has announced a landmark order for 50 Embraer E195-E2 jets, with purchase rights for an additional 50 aircraft. The $4.4 billion deal, revealed on September 10, 2025, not only marks Embraer’s first U.S. sale of its next-generation E2 family but also signals a strategic pivot for Avelo as it seeks to sharpen its competitive edge and expand its reach across the United States and the Caribbean.
According to The Air Current, the order comes hot on the heels of Avelo’s completion of a significant new round of growth capital. Announced just days earlier, this funding round represents the largest investment in the airline since its initial Series A funding in January 2020. While Avelo has not publicly disclosed the investor’s identity or the size of the investment, sources confirm that Embraer itself is providing debt financing to the carrier for its pre-delivery payments—a move that underscores the Brazilian manufacturer’s confidence in Avelo’s future and the E2’s prospects in the U.S. market.
At a press conference in Washington, D.C., Avelo CEO Andrew Levy described the company’s new direction as “Avelo 2.0,” explaining, “We think that we have the right strategy. We just have the wrong airplane for the strategy in this marketplace as it’s evolved around us.” Levy’s comments reflect a broader recalibration within the airline, which launched in April 2021 with a fleet of used Boeing 737s but has since faced headwinds, including withdrawals from several West Coast markets and public criticism over its involvement in flying deportees for U.S. Immigration and Customs Enforcement.
Now, with a fleet of 22 Boeing 737NGs serving 47 destinations across the U.S., Puerto Rico, and three international markets in Mexico, Jamaica, and the Dominican Republic, Avelo is betting that the E195-E2’s unique capabilities will open new doors. “This is a best-in-class small narrowbody airplane,” Levy told reporters, highlighting the jet’s 2x2 seating, power outlets at every seat, large overhead bins, and quieter cabin. “Our customers will love the 2×2 seating, power at every seat, large overhead bins, and quieter cabin. The E2’s performance and efficiency are exactly what we need to continue reshaping affordable air travel in the United States.”
The E195-E2, Embraer’s largest and most advanced commercial aircraft, can seat up to 146 passengers in a high-density configuration, or 132 in a single-class layout with a 31-inch seat pitch. The aircraft’s design promises lower trip costs, improved economics on medium-density routes, and, crucially for Avelo, excellent short-field takeoff performance and longer range. These features will allow Avelo to enter constrained airports and new city pairs that were previously out of reach for its Boeing 737 fleet. “The aircraft’s exceptional performance, size, and efficiency make it the perfect choice for the future growth of our scheduled service network,” Levy said in a news release.
For Embraer, the deal is a long-sought milestone. The company has delivered nearly 800 first-generation E-Jets to U.S. operators, but the E2 family had yet to find a U.S. launch customer until now. “The E195-E2 is a game-changer,” said Arjan Meijer, CEO of Embraer Commercial Aviation, during the Washington announcement. “It delivers fuel efficiency, quiet operations, and short-field capability that will open new markets for Avelo and optimize its network.” Meijer also noted, “We don’t call it a profit-hunter by accident,” expressing hope that other U.S. airlines will be drawn to the E2 once they see it in action.
The order’s timing is significant. Deliveries of the new jets are scheduled to begin in the first half of 2027 and extend through 2032, giving Avelo a two-year window to prepare for its next phase of growth. The dual-fleet strategy—maintaining both Boeing 737s and Embraer E2s—will provide the airline with much-needed flexibility as it seeks to expand its network, particularly into airports with runways shorter than 5,000 feet (1,524 meters), a capability the E2 offers thanks to Embraer’s proprietary Enhanced Takeoff System (E2TS).
According to Reuters, the announcement coincided with a major gathering of aerospace leaders in Washington, where Embraer has been actively lobbying the U.S. government to remove 10% tariffs on its aircraft. Both Levy and Meijer emphasized that they believe tariffs on aviation assets should be zero, with Levy expressing optimism that policy changes could occur before deliveries begin.
The deal also reflects a broader industry trend: while Boeing and Airbus dominate the market for larger jets, regional aircraft like the E195-E2 fill a crucial niche for airlines looking to serve smaller cities and shorter routes efficiently. Embraer, the world’s third-largest planemaker, has been profitable for two years, even as Boeing has struggled with crises and the collapse of a planned $4 billion tie-up with Embraer. Despite this, the E2 series has been outsold by competitors such as the Airbus A220, making Avelo’s commitment all the more important for Embraer’s U.S. ambitions.
Industry analysts have noted that major airlines often view smaller jets as a fleet complication due to the need for additional pilot training, simulators, and other costs. Yet, as Richard Aboulafia of AeroDynamic Advisory pointed out, “The E2 has terrific economics but airlines have an irrational obsession for range they don’t need.” For Avelo, however, the E2’s range and efficiency align perfectly with its short-haul, point-to-point business model.
Financially, the ability to commit to such a large fleet order so soon after a major capital injection signals strong investor confidence in Avelo’s growth trajectory. The airline has reported improving financial results and several profitable months in 2025, following a break-even year in 2024. The Embraer order clarifies how these new funds will be deployed: not to replace the Boeing 737s outright, but to complement them and allow for rapid, flexible expansion into new markets.
As the airline industry continues to evolve, Avelo’s ambitious bet on the Embraer E195-E2 could set a new standard for what’s possible among U.S. low-cost carriers. With the first jets arriving in 2027 and a clear strategy to leverage the E2’s strengths, Avelo is poised to challenge its rivals and offer passengers a fresh, more comfortable flying experience—one that just might change the way Americans think about budget air travel.
