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LATAM to deploy new jets for Brazilian operations
Embraer's shares rise nearly 4% after order announcement
Brazil's government supports deal to boost regional aviation
By Gabriel Araujo
SAO PAULO, Sept 22 (Reuters) - Brazil's Embraer EMBR3.SA secured a landmark deal in its home market on Monday as LATAM Airlines LTM.SN announced a firm order for 24 E195-E2 aircraft, with purchase options for another 50, lifting the planemaker's shares.
The deal marks a long-awaited new order for Embraer's second-generation jets in Brazil , whose government had been lobbying for the sale. Chile-based LATAM will initially deploy the new planes for its Brazilian operations.
Deliveries of the 24 firm orders, worth about $2.1 billion at list prices, will begin in the second half of 2026, the companies said in a joint statement.
LATAM will join rival airline Azul AZUL.N in flying Embraer's E195-E2 in Latin America's largest economy. Azul last placed a firm order for the jets in 2018.
Embraer Chief Executive Francisco Gomes Neto first revealed in an interview with Reuters last year that the company had been in talks with LATAM for a potential order.
The carrier later confirmed it was considering new, smaller jets in its fleet. It cited Embraer's E2 and Airbus' A220, which directly compete in the regional segment with up to 150 seats per aircraft.
Embraer's shares rose almost 4% in Sao Paulo morning trading. JPMorgan analysts said the announcement reinforces their bullish views on the planemaker, as its commercial backlog continues to grow at a strong pace.
"We are extremely proud that the LATAM group has made the best choice to advance the region's connectivity," Gomes Neto said on Monday.
The Brazilian unit of LATAM, the country's No. 1 airline by market share, has been looking for ways to expand its fleet in light of lengthy delivery times for narrow-body planes from larger manufacturers Airbus AIR.PA and Boeing BA.N.
The E195-E2s will join the carrier's fleet of 362 aircraft, which includes Airbus narrow-bodies and Boeing wide-bodies.
The airline's decision was based on the "excellent economics and versatility" of the E195-E2, which allow for the opening of new destinations, LATAM CEO Roberto Alvo said.
Brazil's government, which had been urging local carriers to buy Embraer aircraft to boost regional aviation and strengthen the manufacturer, cheered the deal.
"It's a historic purchase. ... A milestone for regional aviation," Ports and Airports Minister Silvio Costa Filho said.
The LATAM order follows another landmark deal for Embraer earlier this month, as a firm order for 50 E195-E2s from budget carrier Avelo Airlines marked the first U.S. deal for the plane.
(Reporting by Gabriel Araujo; Additional reporting by Fernando Cardoso; Editing by Brad Haynes and Mark Porter)
((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))