Breeze Airways’ Strange Expansion To Mexico

Breeze Airways’ Strange Expansion To Mexico

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Breeze Airways is an ultra low cost carrier based in the United States that launched operations in 2021. The airline was founded by entrepreneur David Neeleman, who is also the person behind JetBlue, among other airlines. The carrier’s business model is based around operating point-to-point flights in underserved markets.

So far the airline has exclusively operated domestic flights, though we know the airline eventually plans to fly internationally. We’ve now just learned the carrier’s first planned international route… and it makes no sense to me.

Breeze Airways plans Los Angeles to Los Cabos route

Breeze Airways has filed with the United States Department of Transportation (DOT) to request a certificate of public convenience and necessity, authorizing the airline to engage in foreign scheduled air transportation. In the filing, the airline has revealed its first international route.

As of November 2023, Breeze Airways plans to launch once weekly flights between Los Angeles (LAX) and Los Cabos (SJD) using Airbus A220 aircraft. The schedule for the 911-mile flight hasn’t been revealed.

Breeze Airways will fly to Los Cabos, Mexico

Keep in mind that the United States and Mexico have an Open Skies agreement, so once Breeze Airways receives permission to operate this route, the airline can in theory add further service to Mexico, pending any airport slot limitations. For example, Mexico City Airport (MEX) is slot restricted, so the airline couldn’t just easily expand there.

Interestingly Breeze has revealed the anticipated financials for the route. That’s unusual, since it’s not something you often see in a filing like this, though it sure is intriguing. According to this forecast, the airline anticipates an operating margin of 8.3%, first year losses of $82,253 (including startup costs), and also expects ticket revenue and ancillary revenue to be identical.

Breeze Airways’ planned financials for LAX to SJD

Breeze Airways’ first international route makes no sense

Breeze Airways’ first planned international route is bizarre, especially in the context of the carrier’s business model. When Breeze launched, the airline started that 95% of the markets it would serve would be ones without competition.

Meanwhile Los Angeles to Los Cabos is one of the most competitive markets between the United States and Mexico. The route is served nonstop by Alaska, American, Delta, JetBlue, Spirit, and United, with some airlines offering multiple daily frequencies. That’s literally the opposite of what Breeze claims that its business model is.

Here’s the thing — it’s one thing if the airline said “we get this market is competitive, but we think we can compete given our cost structure, so let’s give this a shot.” But that’s not what the airline is doing. The airline will fly once weekly in a market where other airlines operate daily frequencies, at an absolute minimum. That’s simply a non-starter for this route succeeding, since it gives travelers so few options in terms of schedule.

So I don’t get it, what am I missing? Does Breeze have some sort of package holiday contract for this route? Is this announcement a red herring, and the airline is claiming this will be its first route to Mexico, but will then change it last minute, once permission is granted?

I love the concept of what Breeze stands for, which is operating point-to-point routes that are underserved with a pleasant passenger experience. That adds huge value for consumers. However, the way this business model has been executed has left a bit to be desired.

Breeze seems to pull out of markets almost as soon as it enters them, not taking time to see how demand evolves, or to build up brand awareness. While I can appreciate the airline wanting to grow in a nimble way and try new things, you tick off a lot of consumers when you keep adding routes and then quickly cutting them.

I can’t really make sense of Breeze’s expansion here

Bottom line

Breeze Airways intends to expand to Mexico as of late 2023, which will be the carrier’s first international destination. However, rather than flying in an underserved point-to-point market, the airline intends to fly between Los Angeles and Los Cabos… once weekly.

I can’t make sense of this route, as it seems to counter Breeze’s business model. The airline will fly in a well-served market in an uncompetitive way, with a schedule that simply won’t work for most consumers. I imagine there’s more to this, so I’m curious to see how this plays out…

What do you make of Breeze Airways’ planned service to Mexico?

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  1. Eric Baime Guest

    This is a great point about serving a route that is incredibly mature. As of now, there are no nonstop flights from Florida to Cabo San Lucas. It would make sense to run a nonstop flight from Miami or Fort Lauderdale to Cabo once a week as no one else is doing this. LA to Cabo is absurd!

  2. Parker West Guest

    Breeze has requested that focus city/airport Provo (PVU) expand to accommodate a U.S. Customs facility in preparation for flights to Mexico. That certainly makes more sense than trying to grab hold of a tinny percentage of the LA-Los Cabos passenger numbers.

  3. Andrew Cee Guest

    Great. If you’ve ever flown to SJD you know it is way over capacity. Often flights wait for a gate and the customs hall barely has room to move.

    Also many people from LAX don’t go for a week because it’s close and it’s a great getaway for a few days. So if they fly just once weekly service, that will pretty much limit round trip bookings to people who stay an entire week, which I’ve never done when I go from LA to Cabo

  4. Eve M Guest

    It’s funny that some readers found the author to be “rude” in this piece. I didn’t. At all. Culturally, we say we laud frank analysis and free expression, and yet we can whine when a business analysis is not sugarcoated with ample decorous expressions. Sheesh. Ridiculous.

  5. Fly Guy Guest

    I loved Breeze Airlines when I flew them. They had a non-stop route from my home airport (2+ million people) to an airport where I had family connections and a frequent need to travel to. The direct flight saved me several hours of travel time and was comfortable and enjoyable. Less than a year into their run, they dropped that route (just like they apparently do on many others). As far as I could tell,...

    I loved Breeze Airlines when I flew them. They had a non-stop route from my home airport (2+ million people) to an airport where I had family connections and a frequent need to travel to. The direct flight saved me several hours of travel time and was comfortable and enjoyable. Less than a year into their run, they dropped that route (just like they apparently do on many others). As far as I could tell, they did little to no advertising/marketing of that route in either city and that probably contributed to its downfall. I wish them well, but they need to do a better job of marketing and market analysis before starting or stopping their routes. They're not an airline that can be counted on to deliver.

  6. Jorge Canavati Guest

    The valley of Mexico has a new airport structured for international service Aeropuerto International Felipe Angeles (AIFA), is it not restricting slots. In fact, it NEEDS business. It is far from the market and I do not support this facility. But it is an option.

  7. greg Guest

    Its designed to see how demand is on the route. I have a feeling MX will be first to add flights to new Tulum airport. Also see this flight out of san Bernardino if they give MX incentives.

  8. Ramon Guerra Guest

    They should have chosen CSL Cabo San Lucas Airport that is really underserved by Airlines and is situated in the same Cabo area, that makes more sense.

    1. Eric Baime Guest

      Very good point, Ramon!

  9. Fred Guest

    Currently U.S. to La Paz, Mexico is either unserved, or unannounced, for seasonal service. This route, once weekly, might make money.

  10. Tim Guest

    Do you think Breeze will ever actually fly their LAX-PVD flights?

  11. Stvr Guest

    They should try Tucson or Vegas to SJD. Fresno.

  12. pnwFlying Guest

    Maybe from LA basin - might be SNA (Orange County/Santa Ana) or LGB (Long Beach) to Cabo - might be CSL/MMSL (Cabo San Lucas International Airport) - that makes sense with their business model!

    1. Bill from DC Guest

      LGB has no customs. Just ask B6, it's among the main reasons why they're no longer there.

  13. Morris Garfinkle Guest

    Must be for a cruise line

  14. Moxy insider Guest

    “We’ve now just learned the carrier’s first planned international route…“

    Have you actually? Or are you guessing based on filings which could be unrelated?
    I have it on VERY good authority that breeze have no plans to actually fly this route.

    1. Moxy insider Guest

      As part of their flag carrier approval. You need to apply for a route as part of it. Rather than give the actual routes they want to fly away they used a dummy.

    2. Moxy insider Guest

      It's part of the flag process. Apply for a route. They don't have to actually fly it, nor would they want to give away the routes they do plan to fly ahead of time.

    3. Inquiring Minds Want to Know Guest

      Is Moxy making money yet?

    4. Moxy insider Guest

      Not yet. But they have areas of the business that are doing very well and seem to be mostly on the right track.
      They have to improve on perception (jumping in and out of markets is a rep they have, somewhat deserved, somewhat undeserved) and on time performance/cancelations.

  15. Eskimo Guest

    I just hope they are not using that financials internally to launch flights.

  16. Sel, D. Guest

    Assuming they do Friday or Saturday service, those flights before Xmas and new years will go for a pretty penny (jet blue has the only flight sub $550 on 12/23). Same thing for flights back after Xmas and after new years. Perhaps they are looking to test the waters and establish Mexico service when demand is incredibly high.

    Also, they will likely combine this with a BreezeThru service so they can connect from another city in the busy holiday season.

  17. Bobo Bolinski Guest

    "When Breeze launched, the airline started that 95% of the markets it would serve would be ones without competition....What am I missing?"

    What you're missing is your naivety and your gullibility that a business is going to stick to what they once said they would do.

    "The carrier’s business model is based around operating point-to-point flights in underserved markets."

    Nonsense. Their business model is based on exploiting college students (and Mormans, if I recall correctly)...

    "When Breeze launched, the airline started that 95% of the markets it would serve would be ones without competition....What am I missing?"

    What you're missing is your naivety and your gullibility that a business is going to stick to what they once said they would do.

    "The carrier’s business model is based around operating point-to-point flights in underserved markets."

    Nonsense. Their business model is based on exploiting college students (and Mormans, if I recall correctly) to reduce labor costs. That's their big innovation -- hiring college students. Some business model!

    All they need to do to make money on this route is undercut competitors' prices by a few bucks. That's it, it's not complicated. Most consumers shop for flight tickets using a single criteria -- the absolute lowest price -- to the exclusion of every other consideration. Nothing else matters, especially in a market like this one. This should surprise nobody.

    1. mdande7 Diamond

      wow. You have to be such an ass? You can make your point with out the rudeness!

    2. Icarus Guest

      Why is it rude ? Check out their business model.

  18. Paper Boarding Pass Guest

    As alluded to in the article, Breeze bangs on about expanding service. However, it pulled out of MSY to PBI after a few weeks. The holiday trade generates only so much revenue and airport incentives only last for so long before they expire. Also, Breeze has to tap dance around Avelo, Spirit, & Frontier which share the same customer base.
    I wonder if the international application with pro forma financial statements is a subtle...

    As alluded to in the article, Breeze bangs on about expanding service. However, it pulled out of MSY to PBI after a few weeks. The holiday trade generates only so much revenue and airport incentives only last for so long before they expire. Also, Breeze has to tap dance around Avelo, Spirit, & Frontier which share the same customer base.
    I wonder if the international application with pro forma financial statements is a subtle sign that the airlines is not generating sufficient cash flow on its domestic program. Being a private company, Breeze is not required to disclose its quarterly or annual financials, but only its PAX volumes as per FAA requirements. Most airlines are eager to hit the IPO market ASAP. Yet, Breeze has been operating for 2 year. Should the airline fold, other airlines would immediately absorb its fleet of A220 jets and become a footnote of defunct airlines in North America.

    1. Guest Guest

      That route was really poor on demand MSY-PBI. It ran for at least 4-5 months but no demand for it unfortunately.

  19. HkCaGu Guest

    One important meaning of Breeze going into Mexico is that the former IATA code MX will return to Mexico more than a decade after the demise of Mexicana. Breeze was conceived as Moxy and obtained the disused IATA code.

  20. BreezeisNoBreeze Guest

    Breeze has a substantial reliability problem. In my very small sample (3 flights), it has been late by 45 minutes, 5 hours, and 3 hours. The latter 2 were due to crew not being available. In the interim, multiple friends also experienced the same issues.

    Flying non-stop from a mid-size city is awesome. Great concept. But, being delayed by 5 hours and then told "we can rebook you in 3 days because that's when...

    Breeze has a substantial reliability problem. In my very small sample (3 flights), it has been late by 45 minutes, 5 hours, and 3 hours. The latter 2 were due to crew not being available. In the interim, multiple friends also experienced the same issues.

    Flying non-stop from a mid-size city is awesome. Great concept. But, being delayed by 5 hours and then told "we can rebook you in 3 days because that's when the next flight is" (not the next open flight; just the NEXT FLIGHT) cannot produce long term success.

    They are very nice. However, execution matters.

  21. T- Guest

    Yet another airline that mainly takes people to holiday destinations. Not any use for most of us. I really don’t care about breeze. They don’t fly anywhere near where I live and if they did they’d probably only fly to The redneck riviera.

  22. Infrequent Flyer Guest

    "you tick off a lot of consumers when you keep adding routes and then quickly cutting them."

    Maybe this happens, but the individuals who would love Breeze care mostly about price, right? They're not in it for the Breeze loyalty program. Perhaps the startup costs goes down in the future? I would take this flight if it happens to be the cheapest or cheap enough to be competitive.

    1. Never In Doubt Guest

      You're right that people choose Breeze for price, but that's irrelevant to Ben's point that you quoted.

      Even if you choose on price, if your flight booked long ago gets canceled because Breeze leaves the market you're still gonna be pissed.

    2. snic Diamond

      Actually, Breeze's model is less about competing on price than offering convenience. That's the whole point of flying nonstop from midsize city X to midsize city Y, without the need to transfer at hub city Z. The big carriers make you transfer, whereas Breeze can (presumably) charge a premium because they fly nonstop - or at least not have to compete on price with other carriers offering the same nonstop.

      I was excited when they...

      Actually, Breeze's model is less about competing on price than offering convenience. That's the whole point of flying nonstop from midsize city X to midsize city Y, without the need to transfer at hub city Z. The big carriers make you transfer, whereas Breeze can (presumably) charge a premium because they fly nonstop - or at least not have to compete on price with other carriers offering the same nonstop.

      I was excited when they announced they had plans for HPN-SFO, but disappointed when they dropped that plan, and even more disappointed when they dropped HPN-LAX after just a few weeks. I find that very discouraging - now I view it as a risk to book them at all because who knows whether they will still be flying the route I book by the time I'm traveling.

    3. BenjaminKohl Gold

      My family took Breeze and the flights were late both ways do to crew issues, and now they're announced that they're cutting routes from our local airport HPN. We're not in a rush to fly with them again. I'm not saying we won't ever, but it'll take some convincing. I have a strong feeling we're far from the only ones like that.

  23. Never In Doubt Guest

    Given Breeze’s standard MO for jumping in and out of markets, I wouldn’t buy this ticket more than a few days in advance!

  24. Brett Lopez Guest

    This airline should fly to the under served market of Merida, MX.

    1. XNA to Merida 2023 Guest

      YES! can we start a petition here!

  25. Sean M. Diamond

    US and Mexico do not have a full "Open Skies" agreement. While there are no restrictions on 3rd and 4th freedom traffic, there are significant restrictions on 5th freedom traffic relative to the model "Open Skies" agreement that the US proposes. Just a clarification.

  26. Izz Guest

    Maybe it intends to fly to CSL instead of SJD? Only JSX flies LAX to CSL.

    1. Dick Bupkiss Guest

      This would make perfect sense.

      There are many "underserved" airports in Mexico -- CSL is just one example, there are lots of others -- that could be profitable destinations for an LCC using small-ish, fuel efficient aircraft flying from large markets.

      Easy pickings once the initial flights get approval and they get a little practice knocked out.

    2. ConcordeBoy Diamond

      Their application specifically lists and requests SJD.

  27. Rrapynot Guest

    Maybe it will actually operate from another LA area airport?

  28. Goforride Gold

    This must be some kind of placeholder. The startup costs must be enormous. They will have to operate either to and from the international terminal in LAX, or fly in from SJD and then be towed over to a domestic gate. There's countless costs associated with international immigration and security issues.

    And, if they expect to sell any tickets at all FROM SJD, they will have to have ticket sales also denominated in pesos.

    The...

    This must be some kind of placeholder. The startup costs must be enormous. They will have to operate either to and from the international terminal in LAX, or fly in from SJD and then be towed over to a domestic gate. There's countless costs associated with international immigration and security issues.

    And, if they expect to sell any tickets at all FROM SJD, they will have to have ticket sales also denominated in pesos.

    The only way this makes sense is as a placeholder for more international routes.

    1. Icarus Guest

      As far as I am aware Breeze use the west gates at LAX which is essentially the Tom Bradley international terminal. Arrivals from SJD are channeled via immigration etc

  29. beachmouse Member

    Once a week routes like that seem to pop up in areas where a lot of the lodging is for short term condo rental and the default rental period is something like one week and for Saturday to Saturday. My home airport (VPS) has a higher flight volume in the summer on Saturdays including a couple of seasonal Saturday-only routes because of that kind of vacation rental structure.

  30. sharon Guest

    This is different than Breeze's original strategy, though the LA market is so large, they have a market no matter how often their service is if the fares are right.

    As international routes have higher startup costs than domestic routes, this could be a way for Breeze to ensure that they recoup some of their startup fees by having flights with solid load factors- rather than routes between odd airports which takes more marketing.

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mdande7 Diamond

wow. You have to be such an ass? You can make your point with out the rudeness!

8
Bobo Bolinski Guest

"When Breeze launched, the airline started that 95% of the markets it would serve would be ones without competition....What am I missing?" What you're missing is your naivety and your gullibility that a business is going to stick to what they once said they would do. "The carrier’s business model is based around operating point-to-point flights in underserved markets." Nonsense. Their business model is based on exploiting college students (and Mormans, if I recall correctly) to reduce labor costs. That's their big innovation -- hiring college students. Some business model! All they need to do to make money on this route is undercut competitors' prices by a few bucks. That's it, it's not complicated. Most consumers shop for flight tickets using a single criteria -- the absolute lowest price -- to the exclusion of every other consideration. Nothing else matters, especially in a market like this one. This should surprise nobody.

3
Brett Lopez Guest

This airline should fly to the under served market of Merida, MX.

3
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