Avelo Airlines is undergoing significant changes as it embarks on a broad restructuring initiative aimed at improving its operations and financial outlook. This week, the budget airline announced its decision to close three of its operational bases while adapting its network to focus on four remaining locations. This strategic shift comes in response to ongoing financial losses that the airline has been experiencing.
The bases that Avelo will be shutting down include those at Mesa Gateway Airport (AZA) in Arizona, Raleigh-Durham International Airport (RDU) in North Carolina, and Wilmington International Airport (ILM), also in North Carolina. However, the airline reassured customers that it will continue offering several routes from both RDU and ILM.
In an effort to simplify its operations, Avelo plans to concentrate its network around the following four bases: Tweed New Haven Airport (HVN) in Connecticut, Wilmington Airport (ILG) in Delaware, Concord-Padgett Regional Airport (USA) in North Carolina, and Lakeland Linder International Airport (LAL) in Florida.
Additionally, Avelo has exciting plans to launch a new base later this year at McKinney National Airport (TKI) in Texas, located approximately 30 miles from downtown Dallas. Currently, this airport does not have any commercial airline services, which means Avelo could potentially become the sole airline operating there unless other carriers decide to enter the market.
As part of these operational changes, Avelo has indicated that significant adjustments to its flight schedules will occur in the near future. This means that some travelers who have already booked flights might see alterations or even cancellations of their reservations. The airline has committed to notifying affected customers directly via email and text messages.
One notable aspect of this restructuring involves Avelo's decision to discontinue charter flights for the U.S. government, specifically those used for transporting individuals facing deportation through U.S. Immigration and Customs Enforcement. These flights, previously operated from the airline's AZA base, have faced criticism and protests from various political figures and members of the public.
Andrew Levy, the CEO of Avelo, shared with staff via email that while these charter flights provided some immediate benefits, they ultimately failed to generate sufficient and consistent revenue to justify the complexities and costs associated with them, as reported by CNBC.
In terms of fleet management, Avelo has announced plans to streamline its aircraft inventory—at least for the time being. The airline will temporarily ground six of its Boeing 737-700 jets, instead focusing on its larger fleet of Boeing 787-800s, which offer better efficiency in terms of seat capacity.
However, Avelo's fleet diversity won't be short-lived; the airline recently revealed an order for up to 100 Embraer E195-E2 jets, expected to begin arriving in the first half of 2027. These smaller jets are intended to facilitate the expansion of Avelo’s network by enabling the airline to operate on leaner and potentially less-trafficked routes.
These developments coincide with Avelo’s announcement of a recapitalization—a strategic business restructuring process that allows companies to convert debt and equity, thereby freeing up cash and enhancing operational flexibility. Last fall, Avelo secured a third round of funding from investors amidst challenges in achieving stable financial footing, particularly given the evolving dynamics of the airline market. This has placed additional pressure on ultra-low-cost carriers like Avelo, as traditional airlines benefit from premium upselling strategies that bolster their profit margins. Just last year, Avelo had to close its base at Hollywood Burbank Airport (BUR) in California, leading to the cessation of all West Coast operations.
