Avelo Airlines, the startup carrier that began operations in 2021, announced that it was profitable in the fourth quarter of 2023. This marks a significant milestone for the airline as it continues to grow and expand its operations. Despite facing challenges such as higher-than-expected fuel prices, Avelo managed to achieve a pre-tax profit for the quarter, thanks to its low-cost business model and efficient cost structures.
While the airline still operated at a loss for the full year, which is common for new companies as they establish themselves in the market, Avelo reported a 74% increase in revenue, bringing in $265 million for the year. CEO Andrew Levy expressed confidence that the airline is on track to be profitable for the full year in 2024, setting a positive outlook for the future.
In a statement, Levy said, “Achieving our first profitable quarter is an exciting and significant milestone in Avelo’s journey. As we approach Avelo’s third anniversary, I am very bullish about our future and the substantial opportunities ahead of us.” This achievement reflects the airline’s commitment to sustainable growth and success in the competitive aviation industry.
Avelo Airlines, along with Breeze Airways, was one of two startup airlines to launch in 2021, just ahead of the resurgence of travel demand during the pandemic. Since its inception, Avelo has expanded rapidly, operating more than 60 routes between over 40 destinations from six bases across the United States. The airline’s bases include Orlando International Airport, Raleigh-Durham International Airport, Hollywood Burbank Airport, Wilmington Airport, Tweed New Haven Airport, and Harry Reid International Airport in Las Vegas.
One of the notable developments for Avelo is the shift of its Las Vegas base to Santa Rosa’s Charles M. Schultz Sonoma County Airport in California. This strategic move reflects the airline’s flexibility and adaptability in responding to market dynamics and passenger demand. Avelo currently operates a fleet of 16 Boeing 737 jets and plans to add five more aircraft to its fleet this year. The airline’s focus on utilizing previously owned aircraft helps to manage costs and maintain operational efficiency.
With approximately 1,000 employees, Avelo maintains a ratio of around 63 employees per aircraft, which is significantly lower than traditional mainline airlines. This lean operating model enables the airline to remain competitive in the ultra-low-cost carrier segment while providing reliable service to passengers. Avelo’s commitment to delivering value to customers through affordable fares and convenient flight options has contributed to its growth and success in the market.
In comparison, Breeze Airways, the other ultra-low-cost startup airline that began operations in 2021, has faced challenges in achieving profitability. Despite expanding to more than 145 routes and acquiring a fleet of new Airbus A220-300 jets, Breeze reported significant losses, as indicated in filings with the Department of Transportation. However, Breeze’s founder, David Neeleman, expressed optimism about the airline’s prospects for turning profitable in the near future.
Neeleman, who also founded JetBlue Airways, highlighted the importance of operational efficiency and cost management in achieving profitability. He acknowledged that the transition to profitability may have taken longer than anticipated but emphasized that the airline is making progress in improving its efficiency and overall business performance. As the aviation industry continues to recover from the impact of the pandemic, both Avelo and Breeze are positioning themselves for sustainable growth and success in the competitive market.
In conclusion, Avelo Airlines’ achievement of profitability in the fourth quarter of 2023 is a significant milestone that underscores the airline’s resilience and strategic approach to business operations. With a focus on cost efficiency, customer value, and expansion, Avelo is well-positioned to capitalize on emerging opportunities in the aviation industry. As the airline looks ahead to 2024 and beyond, it remains committed to delivering high-quality service and driving sustainable growth in the ultra-low-cost carrier segment.