Budget airline Avelo shutting down West Coast operations

BURBANK, Calif. - Avelo Airlines, a Texas-based budget carrier, announced on Monday that it will cease its West Coast operations at Hollywood Burbank Airport by December 2 due to financial difficulties. 

What we know:

The airline will operate with one aircraft from Burbank until December 2, after which its Southern California base, which currently services 13 routes, will close. 

The decision was made because the continuation of service from Burbank is not expected to "deliver adequate financial returns in a highly competitive backdrop."

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The airline intends to move its West Coast fleet to other locations where it anticipates more "efficient longer-term growth prospects." 

Avelo will reinforce its East Coast operations, which currently include hubs in North Carolina, Florida, Connecticut, and New Hampshire. 

Employees in California will have the option to transfer to another Avelo base. 

Customers who have existing flights booked with Avelo from Burbank can cancel their trips online to receive a refund.

What they're saying:

Avelo Airlines stated, "We believe the continuation of service from [Burbank] in the current operating environment will not deliver adequate financial returns in a highly competitive backdrop."

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An airline spokesperson also addressed past criticisms, saying that protests and its contract with the Department of Homeland Security "did not have any effect on its decision to close the base and have not impacted its business."

Dig deeper:

Avelo announced in April it had signed an agreement with the Department of Homeland Security to make charter deportation flights from Mesa Gateway Airport outside Phoenix. It said it will use three Boeing 737-800 planes for the flights.

The Houston-based airline is among a host of companies seeking to cash in on President Donald Trump’s campaign for mass deportations.

In announcing the agreement, Levy said the airline’s work for ICE would help the company expand and protect jobs.

"We realize this is a sensitive and complicated topic," said Levy, an airline industry veteran with previous stints as a senior executive at United and Allegiant airlines.

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Financial and other details of the Avelo agreement — including destinations of the deportation flights — haven’t publicly surfaced. 

Several consumer brands have shunned being associated with deportations, a highly volatile issue that could drive away customers. During Trump’s first term, authorities housed migrant children in hotels, prompting some hotel chains to say that they wouldn’t participate.

Avelo will be a sub-carrier under a contract held by New Mexico-based CSI Aviation, which didn’t respond to questions about how much money Avelo would make under the agreement.

The backstory:

Avelo was launched in 2021 as COVID-19 still raged and billions of taxpayer dollars were propping up big airlines.

It saves money mainly by flying older Boeing 737 jets that can be bought at relatively low prices. And it operates out of less-crowded and less-costly secondary airports, flying routes that are ignored by the big airlines. 

It said it had its first profitable quarter in late 2023.

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Avelo provides passenger service to more than 50 cities in the U.S., as well as locations in Jamaica, Mexico and the Dominican Republic. 

Avelo does not operate regular commercial passenger service out of Mesa Gateway Airport, said airport spokesman Ryan Smith.

Why you should care:

This decision by Avelo Airlines affects travelers who utilize Hollywood Burbank Airport for their travel needs, particularly those on the 13 routes currently served by the airline.

The closure highlights the intense competition and financial pressures within the budget airline sector. 

For customers with existing bookings, the airline is providing a clear path for refunds. 

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The airline's strategic shift to focus on its East Coast operations and other growth areas also offers insight into the evolving landscape of regional air travel in the U.S.

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