Breeze Airways secured an additional $200 million in funding, providing the carrier with a sizable bankroll to support upcoming expansion. The deal involves new and existing investors and gives the company the most capital for any of this year’s startup carriers.
We look forward to working with our new investors, humbled to be considered the best-funded startup in U.S. aviation history, and are excited about the growth that it will fuel.– David Neeleman, CEO and Chairman of the Board
The Series B round was led by funds and accounts managed by BlackRock, and Knighthead Capital Management, LLC. The funding round also includes additional investments by the airline’s existing investors, including Peterson Partners and Sandlot Partners.
The timing of the funding comes just ahead of Breeze‘s anticipated delivery of its first A220 aircraft. The new planes should begin arriving in October and continue cone per month for the next five years. Financing for the first tranchhe of deliveries was previously secured, meaning the funding can be focused on operations rather than fleet CapEx.
Read More: Taking off: The Breeze Airways era begins
Adding the A220s will change the complexion of the carrier’s operations. Its existing dozen Embraer E190 and E195 E-Jets focus on flights shorter than two hours. They also fly relatively low hours each day, owing to limited demand in the markets and low lease costs for the planes. The A220s will be very, very different.
The new planes will focus on longer routes, for starters. Breeze expects the A220s to primarily operate routes longer than two hours.
They will also feature a different interior configuration. The A220s will add a real premium cabin at the front, dubbed “Nicest” in the company’s branding.
And they will come with more expensive leasing rates. This likely leads to higher utilization to cover the costs. And that could lead to other challenges.
Breeze’s operation performance has been less than stellar as it ramps up flying. One rumor says the company ramped up too quickly early on in an effort to get crew trained for the summer peak, thanks to its operating certificate coming a month later than hoped. Blame it on growing pains or anything else, but the carrier is extending block times and adjusting schedules to try to stabilize the operations.
It is also adjusting the routes flown, trimming some early poor performers. This was always expected. No one really believed all the initial routes would be winners. But how that plays out as the new planes join the route network will be interesting. Can the A220 routes adjust as quickly as the E90s? And can the company hit its revenue targets as those adjustments occur?
The good news is that the carrier has a much better cushion financially for that possibility, thanks to the new funds.
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