Avelo Airlines obtained a USD 42 million capital injection in Series B funds, increasing the airline’s invested capital base to more than USD 160 million. It also has confirmed that it will double the number of destinations served, fleet, and staff by 2022.
The U.S. low-cost carrier took off on April 28, 2021, from its first base at Hollywood Burbank Airport (BUR) in the Los Angeles area, having raised a USD 125 million Series A in January 2020.
Of this new round, USD 30 million was contributed by one of the original investors, a fund managed by Morgan Stanley Tactical Value (MSTV), which thus becomes Avelo’s largest shareholder.
«The incremental capital we have raised is a significant vote of confidence in Avelo’s early-stage momentum and the enormous opportunity ahead of us,» said Avelo Founder, Chairman, and CEO Andrew Levy. «This additional capital significantly strengthens our already strong balance sheet and enables the acceleration of Avelo’s growth trajectory in 2022 and beyond.»
«Morgan Stanley’s tactical value investment team is pleased to once again partner with Avelo Airlines on its recent capital raise,» said Tom Cahill, Managing Director and Co-Head of Morgan Stanley Tactical Value and a member of Avelo’s board. «Andrew along with the rest of the Avelo team have done an excellent job of growing the business under unique circumstances.»
Avelo Airlines and its plans for 2022
Avelo recently launched its Tweed-New Haven base on the U.S. East Coast, connecting southern Connecticut and six popular Florida destinations, and the additional capital will allow it to continue expanding.
The company has created 330 jobs in the past fiscal year, and by 2022 expects to add an additional 450 members. It currently has three Boeing 737-700s and three Boeing 737-800s connecting to 19 destinations. By 2022 they will add nine 737NGs and reach 40 U.S. cities.
In 3,000 flights, they transported 345,000 customers, which, according to Cirium data, translates into an average occupancy rate of 80.70%, higher than Startup Breeze Airways that carried 330,000 passengers since its launch.
This week Avelo inaugurated a second destination from Redding (RDD), in northern California, connecting to Las Vegas (LAS), demonstrating that they are seeking to increase their offer to cities with little connectivity and decentralize large hubs.
Since the beginning of cow cost operations, American Airlines and Southwest have enhanced their presence in Burbank, the latter having an absolute dominance with 68.7% of the airport’s flight offer. Avelo Airlines barely reaches 4.8%, but with unique connections and without any competition from other carriers.
