Avelo Airlines is making a bold step in its bid to take on low-fare US rivals, announcing a firm order for 50 Embraer E195-E2 jets with purchase options for 50 more. The deal, worth $4.4 billion at list prices, positions Avelo as the first US airline to commit to Embraer’s E2 series jet and signals a turning point in the carrier’s strategy to sharpen its edge among US budget carriers. Deliveries of the Embraer jets are slated to start in the first half of 2027.
The announcement comes just days after Avelo disclosed a new round of funding from an undisclosed investor — its largest capital raise since the budget carrier’s 2021 debut. That cash infusion was aimed at strengthening Avelo’s balance sheet and fueling growth. Now, with Embraer’s next-generation narrowbody joining the airline’s current Boeing 737-700/800 fleet, Avelo is serving notice to the rest of the US budget airline industry that it intends to compete aggressively on cost and market scope.
Avelo has built its operation on a fleet of 22 Boeing 737NGs, serving 47 destinations across the United States, Puerto Rico, and three international markets in Mexico, Jamaica, and the Dominican Republic. The new Embraer jets won’t replace the Boeing 737s outright but will instead complement the existing fleet and give Avelo more flexibility as it grows, the airline said.
The E195-E2 is Embraer’s largest and most advanced commercial aircraft ever. With seating for up to 146 passengers, it slots in just below the smallest mainline Boeing and Airbus models, offering what Embraer touts as lower trip costs and better economics on medium-density routes. For Avelo, the aircraft’s short-field takeoff performance and longer range are particularly appealing, allowing entry into constrained airports and new city pairs that were out of reach with its 737 fleet.
“This is a best-in-class small narrowbody airplane,” said Avelo founder and CEO Andrew Levy. “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 order marks a welcome milestone for Embraer, which has been eager to secure a launch customer for the E2 family in the US. The company has delivered nearly 800 first-generation E-Jets to US operators, but no US carrier had yet committed to the updated E2 until now.
“The E195-E2 is a game-changer,” said Arjan Meijer, CEO of Embraer Commercial Aviation. “It delivers fuel efficiency, quiet operations, and short-field capability that will open new markets for Avelo and optimize its network.”
The aircraft features Embraer’s proprietary Enhanced Takeoff System (E2TS), which improves performance from short runways, as well as offering reduced noise footprint and double-digit fuel burn savings compared with other regional jets.
The ability to make such a large fleet commitment so soon after a new capital injection appears to underscore the confidence Avelo’s investors have in the airline’s growth potential. In its funding announcement, Avelo pointed to improving financial results and a string of profitable months in 2025 after a break-even year in 2024.
The Embraer order provides clarity on how those funds will be used: to pivot toward a dual-fleet strategy that could dramatically expand Avelo’s US network. With deliveries starting in 2027, the airline is signaling it has a two-year runway to continue building brand awareness with travelers and preparing for its next chapter of growth.