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Mexicana de Aviación Orders 20 Embraer E2 Aircraft

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Mexicana de Aviación has placed an order for 20 Embraer E2 aircraft, split evenly between 10 E190-E2 and 10 E195-E2 jets. Deliveries are scheduled to start in the second quarter of 2025. These jets will feature single-class layouts with 108 and 132 seats, respectively. This move marks Mexicana as the first E2 operator in Mexico, enhancing its fleet for better domestic and international connectivity, while highlighting the commitment to sustainability due to the aircraft's low operating costs and fuel efficiency. The airline has seen rapid growth since its re-launch in December 2023, already serving 18 destinations and transporting over 115,000 passengers.

Positive
  • Mexicana de Aviación's order includes 20 new Embraer E2 aircraft, ensuring fleet modernization and growth.
  • Deliveries starting in 2Q25 provide a clear timeline for fleet expansion.
  • E2 aircraft offer low operating costs and improved fuel efficiency, aligning with sustainability goals.
  • The single-class seat configuration of 108 for E190-E2 and 132 for E195-E2 optimizes capacity.
  • Mexicana becomes the first E2 operator in Mexico, setting a precedent for other airlines.
  • The airline's rapid growth since December 2023 highlights operational excellence.
Negative
  • Large capital expenditure on new aircraft could impact short-term financial stability.
  • Dependence on timely deliveries starting in 2Q25 could pose risks if delays occur.
  • Potential challenges in integrating new aircraft models into existing operations.
  • Initial operational costs and training for new aircraft types may increase expenses.

Insights

Mexicana de Aviación's order of 20 Embraer E2 aircraft signifies a significant fleet modernization effort. This move positions Mexicana as the first E2 operator in Mexico, showcasing a commitment to both efficiency and sustainability. The E2 jets are known for their low operating costs and fuel efficiency, which likely means reduced per-seat costs and potentially lower ticket prices. For investors, this indicates a strategic move towards cost optimization and environmental responsibility, which could enhance the airline's competitiveness in the market.

Moreover, the addition of new aircraft by 2Q25 aligns with Mexicana's growth trajectory. The airline's rapid expansion to 18 destinations within a few months and the accumulation of over 115,000 passengers suggest a robust demand for its services. This fleet addition will likely enable Mexicana to scale its operations more efficiently and maintain a high standard of service.

In the short-term, the deal could drive increased investor interest in Embraer, as it reflects a strengthening order book. In the long-term, Mexicana's growth and fleet modernization could lead to improved market share and profitability, benefiting shareholders.

From a financial perspective, the firm order for 20 aircraft signifies a substantial capital expenditure for Mexicana de Aviación. However, the investment in Embraer's E2 jets, known for their fuel efficiency and lower operating costs, could lead to considerable cost savings over time. The E2 models are designed to offer a reduction in fuel burn by up to 25% compared to previous models, which translates to significant savings in fuel expenses, a major cost component for airlines.

Given that deliveries will begin in 2Q25, the financial benefits of this investment will start materializing in the medium term. Investors should consider the potential impact on Mexicana's financial health and cash flows. The airline's ability to finance this purchase, either through debt or equity and its subsequent impact on the balance sheet will be critical factors to monitor.

For Embraer, this order bolsters its order book and revenue prospects, particularly in the Latin American market. This deal also strengthens Embraer's position as a key player in the regional jet market, potentially leading to more orders from other airlines observing Mexicana's success with the E2 jets.

This order underscores a strategic market positioning for Mexicana de Aviación. By becoming the first operator of Embraer's E2 jets in Mexico, Mexicana gains a first-mover advantage with these next-generation aircraft. The E2's promise of lower noise levels, reduced emissions and improved fuel efficiency aligns with global trends towards more sustainable aviation practices.

The new aircraft will allow Mexicana to offer a competitive product in terms of price and customer experience. The single-class layout with 108 seats for the E190-E2 and 132 seats for the E195-E2 suggests an emphasis on maximizing capacity while maintaining comfort. This configuration should appeal to budget-conscious travelers, potentially expanding Mexicana’s customer base.

For investors, Mexicana's expansion and modernization efforts could lead to enhanced brand equity and customer loyalty. The airline's ability to leverage the E2 aircraft’s capabilities to offer more routes or increased frequencies could further cement its market presence.

  • Firm deal is for 10 E190-E2 and 10 E195-E2 new aircraft
  • Deliveries start 2Q25

SÃO JOSÉ DOS CAMPOS, Brazil,, June 3, 2024 /PRNewswire/ -- Mexicana de Aviación, Mexico's state-owned carrier, has ordered 20 Embraer (NYSE: ERJ; B3: EMBR3) E2 aircraft. The deal is for 10 E190-E2 and 10 E195-E2 jets. Deliveries will begin in 2Q25. Mexicana will configure the E190-E2 with 108 seats, and the E195-E2 with 132 seats – both in a single class layout.

Mexicana will be the first E2 operator in Mexico, benefitting from the E2's low operating costs and fuel efficiency, highlighting Mexicana and Embraer's commitment to sustainability, and improving the efficiency of aviation.

With this strategic decision the Mexican state airline will grow and modernize its fleet, strengthening domestic and international connectivity to offer affordable and comfortable air travel, with the highest standards of safety and service.

Priscilla Doro Solymossy, VP Sales and Marketing, Head of Latin America and the Caribbean, Embraer Commercial Aviation, said, "We welcome Mexicana to the E2 family, the first E2 operator in Mexico. Seeing the success and rapid growth Mexicana has achieved since it restarted operations in December 2023 has been remarkable. The airline is already flying to 18 destinations, and has transported more than 115,000 passengers, accumulating more than 3,280 flight hours in this short period, reflecting Mexicana's commitment to operational excellence and customer service."

Images: https://embraer.imagerelay.com/fl/6124ce0027b544a4b3050d7b0eb0569e

About Mexicana de Aviación

The airline is part of the Olmeca-Maya-Mexica S.A. de C.V. Airport Group, Railway, Auxiliary and Related Services, and restarted operations on December 26, 2023. Its purpose is to improve the quality and coverage of air services, as well as promote connectivity, to be an engine of growth, development and competitiveness at the national level.

About Embraer

A global aerospace company headquartered in Brazil, Embraer has businesses in Commercial and Executive aviation, Defense and Security, and Agricultural Aviation. The company designs, develops, manufactures, and markets aircraft and systems, providing Services and Support to customers after-sales.

Since it was founded in 1969, Embraer has delivered more than 8,000 aircraft. On average, about every 10 seconds an aircraft manufactured by Embraer takes off somewhere in the world, transporting over 145 million passengers a year.

Embraer is the leading manufacturer of commercial jets with up to 150 seats and the main exporter of high value-added goods in Brazil. The company maintains industrial units, offices, service, and parts distribution centers, among other activities, across the Americas, Africa, Asia, and Europe.

Cision View original content:https://www.prnewswire.com/news-releases/mexicana-de-aviacion-orders-20-embraer-e2-aircraft-302162162.html

SOURCE Embraer S.A.

FAQ

What aircraft models did Mexicana de Aviación order from Embraer?

Mexicana de Aviación ordered 10 E190-E2 and 10 E195-E2 aircraft from Embraer.

When will Mexicana de Aviación start receiving the Embraer E2 aircraft?

Mexicana de Aviación will start receiving the Embraer E2 aircraft in the second quarter of 2025.

How many seats will the new Embraer E2 aircraft have?

The E190-E2 will have 108 seats, and the E195-E2 will have 132 seats in a single-class layout.

Why is Mexicana de Aviación's order significant for Embraer?

Mexicana de Aviación will be the first operator of Embraer E2 aircraft in Mexico, highlighting Embraer's market expansion.

How has Mexicana de Aviación performed since its re-launch?

Since its re-launch in December 2023, Mexicana de Aviación has served 18 destinations and transported over 115,000 passengers.

What are the benefits of the Embraer E2 aircraft for Mexicana de Aviación?

The Embraer E2 aircraft offer low operating costs and improved fuel efficiency, contributing to sustainability and operational efficiency.

What impact will the new aircraft have on Mexicana de Aviación's flight operations?

The new aircraft will help Mexicana de Aviación enhance domestic and international connectivity, offering affordable and comfortable air travel.

Embraer S.A.

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