Driving Economic Growth: Avelo Airlines Pursues Expansion
A crown jewel. The company’s most strategic asset.
Those are the words Avelo Airlines chief financial officer Hunter Keay used to describe the company’s operations at Tweed New Haven Airport to 400-plus business leaders Jan. 19.
Keay joined CBIA president and CEO Chris DiPentima at CBIA’s 2023 Economic Summit + Outlook to discuss the highs and lows of the start-up airline’s experiences.
Avelo Airlines launched in April of 2021—challenged by a host of pandemic-related challenges—with its first flight out of Tweed New Haven that November.
Since making its debut, Avelo has carried more than 600,000 passengers in and out of Connecticut on over 5,000 flights, invested more than $100 million in Tweed New Haven, and created 300 jobs here.
“I think there was a market need,” Keay said. “When you think about ultra low-cost carriers, there is really not an ultra low-cost carrier that people like to fly.”
Keay, a well-respected airline industry analyst, said he joined the Avelo team because he believed in founder Andrew Levy’s vision.
“I know a good foundation when I see one for a successful airline,” Keay said.
Levy, a founder of Allegiant Airlines and a former United Airlines CFO, was no stranger to successful operations.
“Avelo really checked a lot of boxes that I have seen set the baseline for airline success,” Keay said.
He said the airline has a number of unique offerings that will drive its success.
No change fees is one example. And for the foreseeable future, Keay expects that the average $75 fare price will not change.
Paired with simplicity and specialty locations, Keay said Avelo takes pride in what it offers the traveler visiting friends and relatives.
“There is a certain expectation that you have when you set foot on a low-cost airline like ours,” Keay said.
“If we can just run a good operation and get people there on time, and have crew members, which is what we call our employees, that are friendly and engaged, that’s really all people are looking for.”
New Haven Operations
That sentiment has been true for travelers using Tweed New Haven Airport.
Avelo offers flights to 14 different destinations from the coastal airport, making it Avelo’s largest base.
Keay said word-of-mouth was Avelo’s best marketing tool for the area.
While most people were booking from New Haven County when Avelo began operations, customers are now also coming from Norwalk and Stamford.
As a former Fairfield County resident, Keay understands the convenience.
“You get from the car to your gate, literally in under five minutes,” Keay said. “That is a value proposition even in itself.”
If the demand continues, the likelihood of Avelo expanding its Tweed operations is strong.
By early 2026, Avports, which manages the airport, is planning an expansion that would double the number of gates.
Avelo faced a series of challenges since launching from California’s Burbank Airport in 2021—the country’s first new airline in 15 years.
The airline carried over 1.2 million passengers on more than 10,000 flights in 2022, added 15 airports to its route map, and expanded its workforce by 220 employees to 550.
However, Avelo was not profitable last year. To turn that around, Keay said the airline is focused on scaling fixed costs.
In New Haven, workforce issues and the state’s jet fuel tax present growth challenges.
Avelo needs to hire more qualified aircraft mechanics, a difficult proposition amid the state’s labor shortage, particularly for such a specific skill set.
“We’ve had to use a little bit more hourly contract labor when we are not able to staff up to the point where we need to have our own people,” Keay said.
Keay said Avelo is working on new recruitment strategies as it looks to grow, with two new bases scheduled for 2023 in addition to Tweed, Burbank, and Orlando.
The fuel tax is where the company hopes to see changes in Connecticut.
At 9% per gallon, Avelo is paying far more in Connecticut than in other states, which either waived or capped the fuel tax.
That presents an additional growth obstacle as the airline looks to offer flights to destinations such as Puerto Rico.
Overall, Keay said the state and New Haven area were welcoming and supportive of its presence.
Corporate citizenship is important to Avelo, as with many other Connecticut corporations.
The company recently hosted a leadership week in New Haven and has supported community-based projects like beautifying the gym at the Boys & Girls Club of New Haven.
“We want to be good neighbors,” Keay said.
“We want to be involved in this community because we’re going to be here as long as Avelo is around.”
With community involvement and expansions, Keay believes Avelo will be a partner and economic driver.
“Airlines are enablers of economic growth, period,” he said.
“It’s a well-documented fact that when an airline adds capacity to a place, the economy in that place improves.”
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