Flybe is the first customer for the Embraer 195 aircraft

Flybe managing director Jim French said the total value of the aircraft orders and options was $950m (�522.6m).

The 118-seat jet will replace existing planes and should position the company for a possible stockmarket float or trade sale in 18 months, he said.

Flybe has grown since switching its brand name from British European, but is smaller than Easyjet and Ryanair.

Smaller planes

Exeter-based Flybe had been talking to aircraft manufacturers Airbus and Boeing about buying 150-seat passenger jets.

But the company, which mainly uses smaller UK airports, said it had chosen Embraer's new plane because it was better suited to those airports.

Referring to the larger-sized aircraft, Mr French said: "Those aircraft would rather be like running a double-decker bus down a country lane, we don't need aircraft that size."

Flybe, which will be the launch customer for the Embraer 195, said it would take delivery of the first of the aircraft in autumn 2006.

The planes will be deployed at Flybe's main bases in Birmingham, Exeter, Southampton, Belfast, Edinburgh, Glasgow, Jersey and Guernsey.

European services

Flybe currently has 99 routes, using 40 airports and spanning seven countries. Unlike Easyjet and Ryanair, eight out of 10 Flybe flights are domestic, but the firm plans to expand more aggressively in Europe.

"In short, the Embraer 195 allows us to deliver our famous low fares to all the regions we serve, and allows us to do it profitably, while at the same time increasing the number of regions we can serve with direct European services," Mr French said.

Flybe spent �267m on 20 aircraft from Canada's Bombardier in January.

The carrier is owned by a private trust belonging to the family of the late Jack Walker, a steel tycoon.