A little over four years ago, Avelo Airlines launched operations, initially exclusively operating flights to and from the West Coast. Well, the airline appears to be cutting all of its West Coast service, instead focusing on the East Coast. Did the airline make some strategic blunders, or is the US airline business just basically impossible?
Avelo winding down West Coast operations
For some context, Avelo commenced service in April 2021, operating a fleet of all-economy Boeing 737s. The carrier’s strategy was essentially to set up bases at airports with potential that had limited competition, and then operating point-to-point routes in underserved markets.
Avelo’s first hub was in Burbank (BUR), with service in the western part of the United States — below is what Avelo’s route map looked like at launch. One of Avelo’s next bases was in Santa Rosa (STS).
While the carrier has continued to operate on the West Coast, we eventually saw the company increasingly expand to the East Coast, setting up bases in places like Hartford (BDL), Lakeland (LAL), New Haven (HVN), Raleigh-Durham, (RDU), Wilmington (ILM), and more. For example, below is the carrier’s current destination map.
There’s now an interesting update, as flagged by IshrionA. It appears that by early December 2025, Avelo intends to completely discontinue service on the West Coast, meaning it’ll fully pull out of Burbank, Santa Rosa, etc.
Not only is the airline not accepting any West Coast reservations for travel beyond those dates, but an email from Avelo customer service even confirms the closure of the Burbank base.
This is obviously pretty significant, and it also shows how quickly the industry evolves. At launch, Avelo seemed to view the West Coast as the area with the most potential, while that’s clearly no longer the case.
Is Avelo’s business model just toast, or what?
It’s not really surprising to see Avelo’s lack of success, given the fundamental shift we’ve seen in the US airline industry.
Labor costs have gone way up, the legacy carriers are better at competing with basic economy as they fly larger planes, and the major carriers are also making a large percentage of their profits from loyalty programs. When you add in the strong demand for premium leisure and long haul travel, it makes it really hard for any small, independent US carrier to succeed.
Avelo is not in a great spot financially. For example, the airline recently started operating ICE deportation flights, since that’s seemingly the most profitable flying that the airline can pick up. That has of course proven controversial, with many local communities and prospective customers protesting the company’s decision. I’m curious if that has had any material impact on the carrier’s demand in California, or if it’s totally unrelated.
Avelo isn’t publicly traded, so we don’t have full insights into the carrier’s financials. However, it seems pretty clear that the airline isn’t doing so well. Avelo’s East Coast network is certainly unique, in terms of the airports the airline has focused on. However, I’m not convinced the fate there will be materially different.
Perhaps Avelo just decided that the West Coast network had matured as much as it was going to, and decided to end service for that reason, while wanting to give the East Coast more time.
Bottom line
Avelo Airlines appears to be ending all of its West Coast operations by early December 2025, including closing its Burbank base. When the airline launched operations four years ago, it was all about the West Coast, while now the focus is on the East Coast.
With how the industry has shifted, I can’t imagine Avelo’s prospects as a scheduled operator are great. Maybe going all-in on deportation is the more lucrative business model?
What do you make of Avelo’s geographical evolution?
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