Dutch flag carrier KLM has firmed up its order for Embraer E195-E2 jets for its Cityhopper subsidiary and added a few more to the firm order too. Originally announced at the Paris Air Show with a Letter of Intent for 15 firm and 20 purchase rights, the order now stands at 21 firm and 14 purchase rights. In total, if all purchase rights are exercised, the deal is worth almost $2.5bn to Embraer.
KLM adds more firm Embraer E2 to its order
Back at the Paris Air Show, KLM became one of the biggest customers of the refreshed E2 version of Embraer’s largest jet. With a fleet of 49 E-jets, KLM is already Europe’s largest Embraer operator, with all these aircraft based in its regional arm KLM Cityhopper. At the time, KLM CEO Pieter Elbers commented,
“Embraer has been a key partner for KLM and Cityhopper over the past ten years. Our customers appreciate the E190 and E175’s. The E2 would be a welcome addition to the KLM fleet, giving us greater capacity flexibility and help to manage down costs. In addition, the environmentally friendly E195-E2 also supports our sustainability goals with lower levels of noise and emissions.”
Although the absolute number of E2s in KLM’s order remains unchanged, the move to six more firm orders will be a strong vote of confidence for Embraer. If and when the 14 purchase rights are exercised, the entire order will be worth $4.28bn. As John Slattery, president and CEO of Embraer said in the press release today,
"KLM's decision to add a further six aircraft to this order is a significant vote of confidence in our E2 programme. Delivering 30% lower emissions when compared to KLM's current E190s, yet still providing a further 32 seats, the E195-E2 will simultaneously increase capacity for KLM at slot constrained Schiphol Airport, while also delivering huge reductions in emissions."
The specific aircraft in this order are due to come from two leasing companies. 11 will come from the backlog of Aircastle, and 10 from ICBC Aviation Leasing. The aircraft will be configured with 132 seats and deliveries are slated to begin in the first quarter of 2021.
The Profit Hunter
The E195-E2 is nicknamed by Embraer the Profit Hunter. With more seats and less fuel burn than the E190, it’s a firm winner for regional operators and low-cost airlines looking to maximize ROI. A profit hunter it is indeed.
To date, the E195 has been the bestselling model of Embraer’s reimagined E-Jets, with a firm order backlog of 124 aircraft. The largest customer so far is Azul, who was also the launch customer of the type. AerCap is the second-largest customer, with 45 on order, followed by Aircastle with 13, Air Peace with 10 and Binter Canarias with five. KLM’s order of 35 puts them as the world’s second-largest customer, excluding leasing companies.
It’s unclear at this stage whether KLM will look to retire some of its older E190s as the new aircraft begin delivering. Although Cityhopper’s 190s are averaging just eight years old, some in the fleet are over 11 years, so may be ripe for retirement by the time these new jets arrive.
Are you excited to see the E2 Profit Hunter in European skies? Let us know in the comments!