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Billion-Dollar Deal Means Travel Is Back -- but Boeing Isn't Getting a Dime

The latest airline deal is huge -- but it doesn't involve a familiar household name.
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We may be in only month one of 2023, but the year has already been storied with countless travel fiascos. 

The year started with a holiday airline meltdown: Popular U.S. carrier Southwest Airlines  (LUV) - Get Free Report left tens of thousands of passengers without flights. When all was said and done, Southwest had canceled or delayed about half its flights, which cost it an estimated $825 million in fees and other expenses. 

Southwest was certainly the headliner for flight troubles, but it wasn't alone. Issues with technology, overbooking, unruly passengers, and ostensibly unanticipated air travel demand have been pushing nearly every airline to its breaking point. And outdated equipment certainly isn't helping the problem. 

Also hindering the solution: supply-chain issues. Even if an airline was ready to pony up billions for new planes and equipment, labor and goods shortages have hampered progress toward upgrading the flying experience. 

Boeing  (BA) - Get Free Report has notoriously struggled with constraints in the aforementioned capacities, confirming 2023 will be "tough," as it grapples with shortages and misappropriated company resources.

Boeing 787 Dreamliner Lead

Boeing's Shortfalls are Embraer's Opportunities 

Boeing may be struggling with shortages, but that doesn't doom the airline industry. In fact, while the U.S.-based company works to mitigate production delays, other aerospace manufacturers are happy to step in. 

Brazil-based Embraer  (ERJ) - Get Free Report is one of those companies. Though notably smaller than the American juggernaut, it's performed better than Boeing year-to-date and almost certainly has more capacity to fulfill orders while Boeing sets itself straight.

That's why its recent deal to sell an $1.17 billion of airplanes, to a customer it didn't identify, is so spectacular. 

"Embraer has secured a new firm order for 15 new E195-E2 aircraft from an undisclosed customer," Embraer said on its website on Jan. 16. "The order is valued at US$1.17 billion at list price and will be added to the Q4 2022 backlog."

Embraer Is Slowly Gaining Global Market Share

The E195-E2 aircraft is one of Embraer's largest commercial jets and has capacity for 146 passengers. It's the Brazilian company's latest iteration of its original E195; it's just as big but boasts fewer emissions and makes less noise. It's also more fuel-efficient. 

Currently the Embraers are popular in Europe; brand new German-based Bavarian Airlines just announced it would lease at least a dozen Embraer E195-E2s. The planes will begin service in Berlin, Frankfurt and Düsseldorf in 2023, and the airline eventually plans to expand service across Europe to London, Vienna, Amsterdam and Geneva.

No word on which carrier Embraer's most recent billion-dollar customer is, but it may be one that's stateside. Embraer currently operates several regional and international U.S.-based airlines, including Republic Airways (based out of Indiana), SkyWest Airlines (Utah), Envoy Air (Texas), Mesa Airlines (Arizona), JetBlue, and American Airlines.