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EDITORIAL: How Avelo rewrote Delaware’s travel equation

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Avelo Airlines has managed to surpass all expectations on air travel from Delaware and has done so through pricing, marketing and service. | DBT PHOTO BY JACOB OWENS

It was almost exactly one year ago when I first debated the potential longevity of yet another run at commercial air service at Wilmington Airport.

At the time, Frontier Airlines had scuttled its second run at service in Delaware after less than two years and falling ticket sales. It was the eighth airline to try to make flying out of the New Castle airport work, only to fall by the wayside.

What could this little-known, upstart Avelo Airlines do to change the narrative in Wilmington?

Apparently, everything.

Jacob Jake Owens Delaware Business Times DBT

Jacob Owens
Editor
Delaware Business Times

It really has been quite remarkable to see the impact the Avelo has made on Delaware’s commercial passenger airport. As of November, it surpassed 200,000 passengers through Wilmington Airport (ILG) – more than doubling the prior record for travelers at ILG set in 2014.

Part of its success has been the variety of destinations, reaching 16 in all with the first flights taking off this month for San Juan, Puerto Rico – it’s the first time commercial flights from Delaware have left the continental United States. Frontier’s last effort in Delaware was a half-hearted, Orlando-only route, while Avelo has reached Nashville, Charleston and Savannah along with more than half a dozen Florida cities.

And while Avelo has an increasing portfolio of destinations in its network, it’s not alone in that fact and is comparatively quite small versus competitors. It’s made up for its smaller roster of cities by being among the nation’s most reliable airlines.

Avelo has achieved year-to-date on-time performance rate at ILG of 81% and a flight cancellation rate of 0.4% – truly remarkable operational reliability when many of its rivals fail to break 80% on such metrics.

And it’s not just noise in the numbers. Just a few months ago, I had Frontier cancel a flight to Atlanta just hours before take-off without any explanation. Family members have frequently had the same experience.

Avelo can retain high reliability factors in part because it flies there-and-back routes that keep crews fresh and removes the chance of lost baggage at layovers. It has also invested in a hub-and-spoke approach that sees airplanes sheltered and maintained in the same place every night, allowing it to consolidate resources and make tracking issues easier.

I compare my frustrating experiences with low-cost carriers like Frontier and Spirit and more costly major airlines like Delta and American to Avelo, which I flew from Wilmington with my family last winter for a trip to Disney World. We found the experience to be far superior to making the drive up to Philadelphia International Airport. Parking was a breeze in the surface lot – although I understand that’s gotten so popular that the airport is now looking to expand parking – and the staff were friendly and excited to be a part of the growth.

Other than boarding in some chilly weather and waiting for the low-tech baggage handling of the small airport following a late-night flight, there really were no drawbacks to the experience. We were home less than an hour after the plane’s wheels touched the ground.

I know many family members, friends and colleagues who have had the same experience with Avelo, and for many it was their first time flying out of Wilmington. It’s a big reason why Avelo has been able to surpass the industry target of 80% load factors, or 80% of a flight’s available seats purchased.

Frontier was never able to reach that target with its most recent service out of Wilmington, but Avelo has an annual average of 83% through August, according to federal transportation data, and routinely sees monthly averages in the high 80th or low 90th percentiles.

The success of Avelo has convinced the airport’s manager, the Delaware River and Bay Authority, to invest in renovations to its terminal and prepare for even larger crowds of passengers. The constant flow of activity at ILG is also likely to begin spilling onto the U.S. Route 13 corridor that has long been neglected as the airport failed to catch on with tourists, potentially leading to additional investment and job growth for hotels, restaurants and small businesses to serve the passengers coming through.

All of that dream will depend on the larger health of Delaware’s partner in the venture though, and Avelo is still very much in a startup stage after launching in April 2021. The company, led by veteran airline industry executive Andrew Levy, has raised $160 million in private equity through two rounds of initial fundraising.

Like most startups, it was operating at a loss as it built its network, hired staff and marketed the new flight patterns. While aircraft gas prices have fallen from 2022 highs, they are still historically inflated, with conflicts in the Middle East likely not helping. Avelo has also committed additional funding to raising pilot wages – a tactic that it likely hopes will also help it stave off unionization of pilots for now as one of the last outliers in the industry.

According to financial data required by the U.S. Department of Transportation though, Avelo has steadily improved its financial position moving from a loss of 48 cents on every dollar in the second quarter of 2022 to 3 cents on every dollar in the second quarter of this year – the most recent data available.

That spells good news that Delaware’s air travel partner is approaching profitability less than three years after launch. A healthy Avelo, and a public supportive of its growing network in the First State, may finally get Delaware over the commercial air hump.

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