Avelo announces investment aimed at strengthening, expanding airline

This financing round represents the single largest investment in Avelo Airlines since the company’s initial Series A funding, a release stated. Details, including the identity of the investor and the amount of funding = were not disclosed. 

The release went on to state that the investment "underscores strong confidence in Avelo’s differentiated business model and track record since the airline’s launch in 2021. The proceeds will be used to fund growth in its scheduled service operation, make targeted technology investments, and enhance the overall customer experience."

Avelo Airlines Founder and CEO Andrew Levy said, “Today marks another important milestone for Avelo. This new capital strengthens our liquidity position and positions us to continue delivering reliable, affordable travel options to millions of  customers who are underserved by other carriers. This investment comes at a pivotal time in the domestic airline industry and will allow Avelo to double down on an addressable market that is too often being priced out by higher fare airlines.”

Avelo did disclose that after closing the books  in  July, it recorded the  fourth "fully allocated profit" over the last five months, following approximately breakeven operating income in 2024 with no special items and no sale leaseback proceeds. The privately held airline does not disclose financial results.

"Avelo’s core margins and cash position continue to improve organically, driven by revenue diversification initiatives and market maturation in our scheduled service operation. Later this year Avelo expects to launch a unique loyalty program, a co-branded credit card, and other third-party revenue initiatives to aid profits,  the release stated.

Avelo serves 47 cities spanning 18 states and Puerto Rico, as well as three international destinations: Jamaica, Mexico, and the Dominican Republic.

Avelo recently announced plans to end its West Coast routes and will focus on the East Coast.

The carrier has taken heat for doing ICE Air deportation charter service out of an Arizona airport. The airline cited the need for the revenue from the charter flights in what it described as a difficult decision.

It was also reported earlier this year  that the airline was seeking a $100 million investment that would allow for further expansion and serve as a cash cushion.

The  recent investment for Avelo  comes as ultra-low-fare airlines  face financial challenges. Spirit Airlines, which serves Philadelphia and Baltimore-Washington filed for bankruptcy for a second time and is ending flights to several cities.

Other airlines have responded by adding routes served by Spirit. That has also happened on West Coast Avelo routes, with reports that Southwest Airlines will fly into Sonoma in California's wine country.

Avelo operates in the ultra-low airline space but has worked to separate itself  from rivals like Frontier and Spirit by having fewer flight delays and cancelations.

Avelo typically offers twice-weekly service from smaller airports like Wilmington.  One exception is Orlando, which will see four-time-a-week flights from the Delaware airport in the fall and winter. Flights are typically about two hours in length.