In spite of airline industry beset by unstable conditions, such as surging oil prices, disruptions in the supply chain, and a shortage of pilots, two upstart airlines, Avelo Airlines and Breeze Airways, have proven to be resilient and profitable.
The low-cost airlines, founded in 2021 amid the height of the pandemic have since quickly grown, linking underprivileged cities all over the country. They have also reported notable growth and financial success.
According to a report by CNBC, the founders of the airlines claim that connecting cities with less competition from major carriers has been a successful strategy.
"When you have Goliaths, and you're just David, it's really hard," said Avelo Airlines CEO Andrew Levy.
Levy stated that he had anticipated the airline to turn a profit sooner, but the invasion of Ukraine by Russia two years ago and high fuel costs during a period of widespread inflation delayed the timeline.
Avelo Airlines has been concentrating on providing service between the Northeast and well-liked vacation destinations in Florida and South Carolina, in addition to routes in California and the western United States. Under the leadership of aviation veteran David Neeleman, Breeze Airways has also adopted a similar approach, eschewing major hubs in favor of smaller airports.
According to Avelo, it carried 2.3 million passengers in 2023, with an average of more than 80% of its seats occupied. In the final three months of 2023, Avelo announced its first profitable quarter. According to a representative for the company, the airline is expected to make a profit annually in 2024. For the entire year 2023, it made $265 million in revenue, a 74% increase over the previous year.
On the other hand, Breeze carried more than 2.8 million passengers last year, with 77% of its flights being fully booked.
In contrast, over 137 million passengers were flown by the biggest domestic airline, Southwest Airlines, in the previous year.
Cirium data shows that American, United, Southwest, and Delta collectively hold roughly 75% of the US market.
According to CEO Levy, Avelo has experienced delivery delays for the used Boeing 737 aircraft it leases. There are five planes on order and sixteen in the company's fleet at the moment.
Last month, Breeze announced that it would exercise options on ten additional Airbus A220 aircraft. By the end of 2024, the company will only operate the A220 in its commercial fleet. According to Neeleman, it is currently flying 22 A220s and will have 32 in service by the end of 2024.
