Breeze Airways: Navigating the Challenges of Domestic Market to Expand Internationally

Breeze Airways, a U.S. budget domestic airline, is making preliminary moves to expand its services to sunny international locations and parts of Europe, according to the airline's founder. The airline is seeking flag carrier approval from the Federal Aviation Administration (FAA), which would eventually enable it to capitalize on peak season travel to destinations such as Ireland, said Breeze CEO David Neeleman. The airline has just commenced air service in Plattsburgh, New York, a location popular with Montreal travelers.


Despite a surge in travel leading to robust earnings for North American legacy carriers this year, U.S. budget airlines have found it challenging to achieve sustainable profitability due to lower yields on domestic routes and a strong demand for international travel. Breeze, which was launched in 2021, uses smaller 137-seat Airbus A220 jets to cater to secondary U.S. cities that are not directly serviced by larger airlines. This strategy allows Breeze to fill the gap left by larger airlines' reductions in regional routes.

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Breeze is set to begin service in Burlington, Vermont in January, where budget airline JetBlue Airways Corp is reducing its service. Neeleman, who has founded five commercial airlines including JetBlue, stated that the lack of air service or the complete disappearance of it in some areas, or the presence of only regional planes going to hubs, has opened up hundreds of market opportunities for Breeze. He added that the market has undergone significant changes, creating a substantial opportunity for Breeze.


While Neeleman believes that U.S. domestic fares have reached their lowest point and are unlikely to decrease further, he noted that ultra-low-cost carriers (ULCCs) are struggling due to their rapid expansion with larger aircraft that need to be filled in markets where they are not profitable. He commented on the current state of ULCCs in the U.S., stating, "We're seeing absolute obliteration of ULCCs in the U.S. right now."

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