Low-cost airlines operate on a completely different business model than major carriers. They were first introduced in Europe as a method to offer basic pricing for short flights between adjacent locations. While charging for “extras” like seat preference, baggage, and occasionally even printing the ticket or having the ability to speak with airline representatives before arriving at the airport, the airline makes up the difference in revenue from the low base ticket price, which aids in marketing the business and drawing in customers looking for affordability.
In the past ten years, there has been a proliferation of low-cost airlines in Europe, North America, and Asia. In the United States, David Neeleman, the founder of JetBlue Airways (JBLU), founded Breeze Airways (BREZ) out of Salt Lake City to cater to customers in smaller markets like Springfield, Columbus, and San Bernardino. By providing flights to sunny areas like Florida from cities whose residents would have normally had to fly out of a nearby metropolis, the airline was able to swiftly grow its client base. Amidst a surge in air travel demand, investors focused on low-cost carriers.
In March, Breeze Airways reported its first profitable quarter following three years of operation. It had previously disclosed a net loss of $2.55 million for 2023 as a private corporation, which represented an improvement over the $3.79 million loss for 2022. According to one industry observer, an airline must wait eight to twelve years on average after launch before turning a profit.
Breeze reported that its revenue increased by 30% over the previous year, but it did not disclose the precise amount of money it made in March.
Other initiatives by Breeze to increase revenue include expanding into new markets like Burlington, Vermont, and Biloxi, Mississippi; introducing a branded Visa (V) credit card that rivals Spirit Airlines’ (SAVE) product; and acquiring a fleet of brand-new Airbus A220 (EADSF) aircraft.
