Launching an airline is far from easy. Doing so in the midst of a global health pandemic ups the challenge factor significantly. Breeze Airways is making significant progress in its planning, with additional funding secured and FAA milestones reached. It also has a new plan for what the operations will look like when they launch.
Major money moves
In May 2020 Breeze presented total assets of $18.7mm with plans to raise approximately $45mm more over the summer. The equity raise came a month later than previously thought, but at the end of August the company secured $83 million. The deal significantly diluted the ownership stake of founder David Neeleman, from 82% to 36%. A pair of new 10% owners are now in play. But Neeleman is very much still in charge of the operations (including 2 votes on the 7-member Board of Directors) and pushing forward with his ideas of what a new airline should look like.
Along with the additional funding the company also secured “Gate 2” clearance from the FAA. The company commenced pilot and dispatcher training last week.
Boosting revenue before first flight
In addition to the funding the company revised its forecast revenue plans for scaling up the operations. The first six months of operations will fly E190s in a 108 or 118 seat layout, leased from Azul or NAC as previously planned. With the revised schedule and route map (see below) in play, Breeze now anticipates significantly higher revenue per passenger in the first year of operations than the prior iterations suggested.
Rough estimates based on the most recent DOT filing suggest a RASM in the 9 cents range from the start, with per-passenger revenue at $90ish per flight, assuming a 75-80% load factor. Those numbers grow quickly, especially as the longer-haul markets come online. By the end of the first year of operations Breeze forecasts $15 million in monthly revenue on 328 weekly flights operated by 22 airplanes. That pushes per passenger revenue above $140 per flight, though RASM holds relatively steady as stage length increases.
Skipping charter service
Launching the airline with charter services was supposed to help ease into the operations. Fewer flights and more flexibility in the offerings would be something of a soft launch before the real challenge of scheduled service hit. But the college sports world is not operating at nearly the same levels as in prior years. Those sports charters historically delivered a good chunk of business but without them the market is nonexistent. And so Breeze‘s charter offerings will also disappear. Instead, the company will launch straight into scheduled service in March 2021.
A new route map
What the route map will look like when service launches also shifted under the most recent plans. The latest iteration calls for launching in March 2021 with two southern hubs connecting to multiple destinations in the northeast, southeast and southern plains. These initial hubs will grow to include additional markets in the midwest and northeast. Additional airports in the southeast will be added as the company matures. By October 2021 the company anticipates five southern gateways connecting to more than a dozen airports with 60ish daily departures.
While specific planned routes are redacted from the filing and there are some confusing claims with respects to airports served versus time zones route such as these could be in the offing.
The company still intends to grow into transcontinental routes as it takes delivery of its A220-300s, now slated for later in 2021. By the end of its first year in operation the company anticipates a trio of transcon markets (5.5-6 hours westbound) plus a mid-con or New England/Texas option (3:50 westbound).
More on the Breeze path to operations:
- Breeze blows inland, slow-rolls launch plans
- What we learned about Breeze in this week’s DOT filing
- Pilots furloughs put squeeze on US regional fleets
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