US discounter Avelo Airlines has completed a third round of fundraising amid major operational shifts, with the cash infusion representing the “largest single investment in Avelo” since its pre-launch phase.
The Houston-headquartered airline does not specify the amount raised in its Series C funding round, nor does it identify the ”new partner” that has invested in Avelo’s business.
However, the airline tells FlightGlobal that the latest fundraising round is the airline’s greatest investment since its $125 million Series A round in January 2020.
In 2022, Avelo disclosed that it had raised $42 million in Series B funding, with those shares selling at a “significant premium to the original Series A shares”, Avelo said at the time. That round included investment from the Morgan Stanley Tactical Value investment fund.
Avelo’s latest fundraising effort will be used to ”fund growth in its scheduled service operation, make targeted technology investments and enhance the overall customer experience”.
”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,” says Andrew Levy, Avelo’s chief executive.
Privately owned Avelo does not disclose its quarterly financial performances, but “just closed the books on July” and claims to have been profitable in four of the past five months.
”Avelo’s core margins and cash position continue to improve organically, driven by revenue diversification initiatives and market maturation in our scheduled service operation,” it says.
Last month, Avelo signalled fleet-growth plans by adding its 22nd Boeing 737.
But cracks have appeared in the carrier’s operation, as Avelo’s announcement that it will close its base in Burbank by December, and withdraw entirely from the West Coast of the USA as it focused operations on the East Coast.
Avelo’s West Coast withdrawal opened the door for competing start-up carrier Breeze Airways, which now plans to launch new flights on the same routes that Avelo will abandon this fall.
In April, the carrier made a controversial decision to fly chartered deportation flights for US Immigration and Customs Enforcement, citing at the time sluggish demand for low-cost airline seats.
