Air TransportAzul cuts Embraer E195-E2 order from 51 to 25 aircraft amid Chapter 11 process
Azul Linhas Aéreas and Embraer have renegotiated a long-standing aircraft purchase agreement, cutting Azul’s firm order for the E195-E2 from 51 jets to just 25.
The change was disclosed on Monday as part of Azul’s Chapter 11 bankruptcy proceedings in the U.S. Bankruptcy Court for the Southern District of New York.
While the court decision was published on December 22, the revised agreement between the airline and the manufacturer was signed earlier, on November 26, and formally ratified only this week.
The original order for 51 E195-E2 aircraft stemmed from a series of agreements signed between 2014 and 2018. At the time, the deal carried a reference value of approximately US$3.1 billion based on then-current list prices.
A deal years in the making
Azul was expected to become one of the main customers for the E195-E2 due to its extensive E-Jet fleet. In 2014, during the Farnborough Airshow in the United Kingdom, the airline signed a letter of intent for 30 firm aircraft, along with purchase rights for an additional 20 jets.
In December 2018, Embraer and Azul announced another letter of intent covering 21 additional E195-E2s, bringing the total number of firm orders to 51.
Despite the size of the commitment, Azul never took delivery of any E195-E2 aircraft under this purchase contract.
Largest operator, but through leasing
Although Azul became the launch customer of the E195-E2 in 2019, the aircraft entered its fleet exclusively through operating leases. Since then, the airline has received around 40 E195-E2s, all sourced from leasing companies rather than directly from Embraer under the firm order.
As a result, even while becoming one of the world’s largest E195-E2 operators, Azul kept its original purchase agreement on hold for years.
Financial restructuring drives renegotiation
The reduction in the Embraer order comes as Azul continues its judicial restructuring process, initiated in May, aimed at lowering short-term debt and improving liquidity. As part of this effort, the airline has renegotiated multiple leasing contracts over recent months.
In recent weeks, Azul began taking delivery of seven additional leased E195-E2 aircraft. At no point, however, did the airline publicly signal that its long-standing purchase agreement with Embraer would be reduced.
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