Avelo Bails on West Coast; Breeze Backfills a Bit

Avelo is closing its west coast operations. The carrier announced this week it would wind down the services, including closure of its initial base at Burbank, by early December.

There is rarely one singular reason why decisions like this are made, and this one is no different. We believe the continuation of service from BUR in the current operating environment will not deliver adequate financial returns in a highly competitive backdrop. We intend to redeploy these BUR aircraft to business areas where we see more efficient longer-term growth prospects, while also building depth and breadth to our East Coast operation.

– Avelo CEO Andrew Levy

---

---

Avelo’s struggles are not entirely new, though they took on new urgency at the beginning of Q2 2025. That was when the carrier, facing a collapse of revenue, announced it would close its base in Santa Rosa, CA while opening a new line of business in Mesa, AZ, operating deportation charters for DHS.*

The company insists that new DHS contract and associated protests did not drive the need to close the west coast operations. And that may very well be true. Digging into DOT data shows a business that has been struggling for a while now, and executives knew.

Prior to the April move the carrier’s passenger numbers dipped. Slashing fares couldn’t fill the seats, and loads dropped as well. CASM rose and RASM fell. It was a bad situation. Indeed, there were signs of weakness on the west coast somewhere in the middle of 2024.

By the time the Q4 schedule operated it was down 10% (measuring departures) from Q3, while the east coast saw a 15% boost. From Q4 2024 to Q1 2025 the west coast dropped an incredible 39% while the east coast grew another 5%. The east coast grew another 10% into Q2 of this year, with schedules for Q3 holding steady.

Now the west coast will disappear completely (the above data from Cirium is based on published schedules prior to the announced drawdown on the west coast).

---

---

Looking at the raw data, however, it is unclear the east coast operation is faring much better financially. Load factors are holding 3-5% higher on the east coast than the west, though average east coast fares reported to the DOT are a smidgen lower than those on the west coast. Block times are lower on the west coast, suggesting shorter (and thus slightly cheaper to operate) flights.

The east coast operation is roughly triple the size of the west coast. Perhaps some economies of scale are playing out to make the comparable revenue numbers work better. But it is by no means a certainty that Avelo’s doubling down on the east coast operations will lead to profitability.

A Fresh Breeze Blows In

We do know, however, that Breeze plans to take advantage of the vacuum left by Avelo’s departure. Breeze wasted little time in announcing it would launch seven routes connecting five west coast cities.

---

---

Notably, Breeze is not trying to fully replace Avelo’s position. Breeze will only backfill four of the Avelo routes at Burbank. It will avoid Santa Rosa, CA (STS) completely, a market where Avelo once had a base (closed to facilitate the DHS ops) and where it operates seven routes today.

Looking Avelo’s historical average fares for those markets offers a few hints as to which were selected for replacement; they outperformed the average, while those skipped came up short.

It is also perhaps worth noting that Breeze’s financial success is still not a sure thing. Based on DOT data it has more debt and larger losses than Avelo. Breeze also claims it saw an operational profit in Q2 2025; the DOT data will lag by a few months to see the details on that.

One detail we know right now is that the average fare for Breeze has trailed that of Avelo in recent quarters. But thanks to the world of modern airline retailing that’s not the entire story. Breeze’s RASM is higher than Avelo’s, thanks to its fare bundles and differentiated on-board offerings.

Those numbers show up in the “Transport Related” revenue chunk of the DOT reports, where Breeze consistently sees a larger share of its revenue than Avelo does.

As the chart above shows, however, Breeze’s CASM is also markedly higher than Avelo’s. So while the company can generate more revenue for its flying that does not directly translate into better profitability. Given Breeze’s claim of an operating profit in Q2 it will be interesting to see how those numbers compare when they are published. 

We also know Breeze has deeper pockets. That funding has allowed it to grow faster and absorb the operating losses more easily, at least for now.

---

*I’ve not been shy about my views of that decision, including a pending lawsuit related to my protest of it. But I’m keeping this reporting about the airline numbers.