As US-based Avelo Airlines approaches the third anniversary of its first flight, the company has announced that it completed 2023 with strong year-over-year revenue growth and its first-ever profitable quarter. For the full year 2023, Avelo improved its pretax margin by 15 percentage points compared to 2022.
In 2023, Avelo flew 2.3 million passengers, generating $265 million in revenue, an increase of 74% over 2022. Additionally, Avelo concluded 2023 with a pre-tax fully allocated profit for its fourth quarter – the first since it started flying in 2021. Specific figures have not been disclosed by the airline.
Avelo also said that in its brief existence, the carrier has also established the lowest cost structure of any US airline. In Q3 2023, Avelo reported a 6.9 cents stage length-adjusted Cost per Average Seat Mile (CASM) excluding fuel – the lowest in the US airline industry. This improved further in Q4 2023 to 6.6 cents. Avelo achieved this unit cost outcome despite relatively low aircraft utilization of eight hours per day or less.
“Achieving our first profitable quarter is an exciting and significant milestone in Avelo’s journey,” said Avelo Airlines Founder, Chairman, and CEO Andrew Levy.
“I am confident Avelo’s strong liquidity position, ongoing margin improvement, healthy revenue outlook, industry-leading reliability, and rigorous cost discipline will deliver our first profitable year in 2024. As we approach Avelo’s third anniversary, I am very bullish about our future and the substantial opportunities ahead of us. I am especially appreciative of our dedicated 1,000 Avelo Crewmembers whose One Crew teamwork and friendly customer focus will ensure Avelo continues to thrive in 2024 and beyond,” he added.
“Avelo achieved this profitable outcome – unadjusted and free of special items – despite a high fuel price in the period on the back of a strong demand environment and a low non-fuel cost structure that continues to improve, said Avelo Airlines Chief Financial Officer Hunter Keay.
“Avelo’s non-fuel unit costs are half of the US airline industry average, and we see this gap widening in 2024. Low costs enable low fares, which is even more important to consumers in the current high-inflation environment,” he added.
Since taking flight on April 28, 2021, Avelo has flown more than four million passengers on more than 30,000 flights. The carrier currently serves 48 destinations spanning 23 states and Puerto Rico. The airline operates 16 Boeing Next-Generation 737 aircraft (nine 189-seat 737-800s and seven 149-seat 737-700s). The airline expects to take delivery of five additional 737s by the end of 2024.
The low-cost airline operates from six bases located at Los Angeles’ Hollywood Burbank Airport (BUR), Southern Connecticut’s Tweed-New Haven Airport (HVN), Orlando International Airport (MCO), the Philadelphia and Delaware Valley region’s Wilmington Airport (ILG), and Raleigh-Durham International Airport (RDU). On May 1. 2024, the airline is planning on moving its Las Vegas base at Harry Reid International Airport (LAS) to the Bay Area’s Sonoma County Airport (STS).
Continuing with the positive news, in January 2024, Avelo was the highest-ranking US airline for on-time performance with 78.81% of all Avelo flights arriving at their destinations within 15 minutes of their scheduled arrival time, according to US Department of Transportation data. The industry average figure among all US carriers in January 2024 was 72.67%.
Additionally, in January 2024, Avelo achieved the industry’s second-lowest flight cancellation rate of 1.08%, significantly better than the industry average flight cancellation rate in January of 3.51%.
