My take: For Avelo, a celebration and encouraging signs on the financial front

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In the past several months, i have attended four Avelo Airlines events at Wilmington Airport.

That might be overkill on the part of the and airport manager the Delaware River and Bay Authority. 

But it could be that Avelo is coming close to cracking the code in connecting small airports in heavily populated areas with popular regional destinations.

The festive event felt different as the the mid-November debut of twice-weekly service between Wilmington (ILG) and San Juan, Puerto Rico was announced.  Twice weekly flights to Sarasota, FL in early November are also  scheduled.

Avelo and the DRBA pulled out all the stops this week at the latest celebration. On hand were representatives of the vibrant Puerto Rican and Hispanic communities in the Delaware Valley as well as a dance group, musicians and a sampling of Puerto Rican food that is gaining national renown.

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Flights to San Juan and more than a half dozen Florida airports  pose finanial  risks for the 15-jet airline, especially with deep discounters Frontier and Spirit and dominant carrier American all offering Philly nonstops.

Perhaps the most encouraging news  came in recent posts from Enilria, a newsletter that takes a deep dive into airline financials and passenger traffic. 

According to one post, privately held Avelo is closer to profitability, especially when compared to start-up rival Breeze. 

Both are fighting it out for market share in southern New England, with Avelo based in New Haven, CT and Breeze holding down the fort in Hartford. 

Breeze jets come  with  frills including first class seating, WiFi and beverage service. Avelo sticks with the basics including older, less expensive Boeing 737 jets, no WiFi and complementary water as the only beverage option. So far, the Breeze’s formula is dragging down the bottom line. 

According to Enilria, in the fourth quarter of 2022 and the first quarter of 2023, Avelo was approaching profitability with the young carrier outperforming Hawaiian and Jet Blue, both of which lose money on domestic service. Avelo’s financial performance lagged in the first quarter as it added  service from Wilmington and other cities.

Avelo losses in the first quarter were 17 cents on a dollar Breeze, by contrast, is burning through much of its $300 million initial investment with its flights losing a whopping 71 cents on a dollar. Investments in Avelo are about half the figure for Breeze.

None of this means Avelo is out of the woods. Enilria has reported turnover in a key post that determines routes, with early disappointing results in Las Vegas. (The airline has since added destinations from Sin City.

So far, Avelo’s strategy is to keep costs down, reduce delays with shorter nonstop flights and find sweet spots like Wilmington. Essential to its success is a higher level of customer service that makes up for the lack of frills. passengers.

It helps that both Spirit, Frontier and even American often come in with low customer scores. Moreover, in-terminal parking in Philly is perhaps the costliest in the nation and we all know about the long walk through the terminal while enduring sometimes lengthy TSA screening lines

It will be interesting to see how Avelo performs in the second quarter. At that time, we may gain some insights into how additional service from airports like Wilmington (home of two of carrier’s 15 jets) affected the bottom line.

Based on recent news and a quartet of events in less than a year,  the arrow is pointing in the right direction. – Doug Rainey, chief content officer.

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