When Avelo Airlines eked out its first quarterly profit during the fourth quarter of last year, it was helped by being the lone carrier at Tweed New Haven Airport in Connecticut, its primary East Coast base.
But beginning this winter, Avelo will face competition from fellow discount carrier Breeze Airways, which will add 10 routes from the small airport between December and February, including six that Avelo already serves.
Breeze chief commercial officer Lukas Johnson said the airline's move into New Haven is opportunistic and isn't geared toward challenging a fellow young discount competitor on its home turf.
"If you look at the total number of seats of Avelo and Breeze combined, it still far underserves the million local catchment population plus anyone else you'd draw with lower fares and a more convenient airport experience," Johnson said.
But Breeze's decision to fight it out with Avelo at Tweed New Haven, an airport that has just three gates to go along with two ground boarding positions, surprised some industry watchers.
"There's a lot of confusion about that going on, and -- guess what? -- it's all legitimate confusion," analyst Mike Boyd, president of Boyd Group International, said in a late-August episode of the "Aviation Humpday" podcast that he co-hosts.
However, Boyd and other analysts aren't fully befuddled by the move. New Haven sits along the affluent Connecticut coast, which has a population of approximately 1.7 million, said Will Livsey, an analyst for flight data provider Cirium. Meanwhile, the drive from New Haven to any one of the three primary New York-area airports takes two hours or longer, depending on traffic.
"They both see the market opportunity, and both management teams have experience working for low-cost carriers and putting capacity into markets where people thought you'd be crazy to do that, and they proved everyone wrong," Livsey said.
Still, the timing of Breeze's announcement, barely two weeks after Avelo announced that this fall it will enter Bradley Airport north of Hartford, where Breeze has a base, fueled questions about Breeze's motivation: Namely, whether the move is a bit of a tit-for-tat as the two newest U.S. mainline carriers jockey for market share in the Northeast or if Breeze would have entered New Haven even if Avelo hadn't moved in on Hartford (with seven routes, including its first international service).
Breeze's answer, according to Johnson, is that New Haven has long been on the carrier's radar.
"Regardless, we were looking at continuing to grow in the Connecticut region," he said, adding that the airline's founder, David Neeleman, has a home there. "This was something we'd been looking at and working with the airport for a very long time."
Along with its strategic location, a bonus offered by New Haven is that Breeze, like Avelo, won't have to compete with any of the large U.S. airlines.
The airport also has plans to expand. A proposed $165 million project would include a new terminal with one additional gate. It would also lengthen the New Haven runway, opening the door for Avelo and Breeze to make lift with heavier fuel loads than is currently possible, meaning longer routes would become an option. Currently, Avelo mostly flies to Florida and other eastern destinations from New Haven, as Breeze will do when it launches there.
Johnson said that Breeze wanted to get into New Haven while the small airport still has open capacity. And he argued that even with the announced Breeze service, the Connecticut coast will be underserved, even on routes that Breeze and Avelo will both fly.
Livsey offered a less certain assessment of the market dynamic.
"It could be that it will support two low-cost carriers," he said of Tweed New Haven. "Time will tell."