After nearly four years of upheaval caused by the Covid-19 pandemic, the airline industry is slowly finding its footing again. The largest U.S. airlines have managed to return to profitability, and now upstart carriers like Avelo and Breeze Airways are looking to join them. Despite launching in the midst of the pandemic, these two low-cost carriers have experienced rapid growth and success by focusing on underserved markets where competition from major carriers is minimal.
Avelo Airlines CEO, Andrew Levy, candidly acknowledges the challenges that come with competing against aviation giants like Delta, American, United, and Southwest. These major carriers control the majority of the U.S. market, leaving smaller airlines like Avelo and Breeze with limited room to grow. However, by strategically choosing routes and airports with less competition, both Avelo and Breeze have managed to carve out a niche for themselves in the industry.
Despite their small size compared to industry leaders like Southwest Airlines, Avelo and Breeze have achieved notable milestones in terms of profitability. Avelo reported its first profitable quarter in the last three months of 2023, with revenue reaching $265 million for the full year – a 74% increase from the previous year. Similarly, Breeze is on track to achieve its first profitable year in 2024, marking a significant accomplishment within just a few years of launching.
Expansion Strategy
Both Avelo and Breeze have adopted a low-cost carrier model that focuses on offering affordable base fares and charging fees for additional services like checked luggage and advanced seat assignments. By targeting secondary airports and avoiding major hubs, these airlines have been able to attract customers seeking budget-friendly travel options. Avelo currently serves around 50 destinations with plans to expand internationally, while Breeze flies out of 50 airports and hopes to launch international service by 2025.
In addition to facing stiff competition and financial constraints, Avelo and Breeze have had to navigate operational hurdles that have plagued the entire airline industry. Factors like the shortage of pilots, rising labor costs, supply chain disruptions, and delays in aircraft deliveries have all posed challenges for these upstart carriers. However, both airlines have managed to adapt and overcome these obstacles through strategic planning and effective leadership.
Looking ahead, Avelo and Breeze remain optimistic about their prospects for sustainable growth and profitability. With plans to continue expanding their route networks and services, these airlines are positioning themselves as viable alternatives to traditional carriers. By staying true to their low-cost business models and focusing on customer satisfaction, Avelo and Breeze are proving that there is room for innovation and competition in the U.S. airline industry.
The success of Avelo and Breeze Airways serves as a testament to the resilience and adaptability of the airline industry in the face of unprecedented challenges. By targeting underserved markets, embracing a low-cost carrier model, and demonstrating a commitment to excellence, these upstart airlines are paving the way for a more diverse and competitive aviation landscape. As they continue to grow and evolve, Avelo and Breeze are poised to make a lasting impact on the future of air travel in a post-Covid world.