Breeze Airways Reports First Quarterly Operating Profit… Finally!

In 2021, we saw the launch of Breeze Airways, a low cost carrier founded by serial airline entrepreneur David Neeleman (also behind JetBlue, WestJet, Azul, and more).

While the airline isn’t publicly traded, finances shared with the Department of Transportation (DOT) in the first couple of years suggested that the airline was hemorrhaging money. When you combine this with the general financial challenges that low cost carriers in the United States have been facing, many wondered if the carrier would have a long term future.

There’s now an interesting update when it comes to the carrier’s journey to profitability.

Breeze Airways reports Q4 2024 operating profit

Breeze Airways has announced that it turned its first full quarter operating profit in the fourth quarter of 2024. The company generated more than $200 million in revenue in the quarter, and achieved an operating margin of more than 4%. Total revenue for 2024 was $680 million, an increase of more than 78% compared to 2023.

Prior to that, the only other financial milestone that Breeze shared is that it turned its first full month operating profit in March 2024, shortly before its third birthday. In March, the airline announced a 30% increase in year-over-year unit revenue, while generating more scheduled service revenue that month alone than in the entire first quarter of 2023.

The airline also turned a profit in April 2024, but then reportedly wasn’t profitable in the months after that, due to major capacity increases. In total, Breeze added 29 new destinations in 2024, and increased available seat miles (ASMs) by more than 52%.

Here’s how Breeze CEO David Neeleman describes this profitability milestone:

“This milestone is a major accomplishment for Breeze and a strong testament to the hard work, dedication, and determination of our more than 2,000 incredible Team Members. In under four years, we have managed to grow and expand Breeze at an unprecedented rate while establishing a robust presence in dozens of underserved markets across the U.S. Most importantly, we’ve done so safely, providing millions of people access to efficient, affordable, and elevated air travel. It’s clear our hybrid model – one we refer to as ‘Nice Low-Cost Carrier, or NLCC’ – is not just working, but thriving.”

Interestingly, it still seems like Breeze didn’t quite meet its goals. Back in February 2024, Neeleman stated that he expected the company to turn a profit for the full year of 2024. While the airline ultimately earned a quarterly profit, it appears the company likely wasn’t profitable for the entire year (or else that would’ve been announced).

Nowadays Breeze primarily flies Airbus A220-300s. The airline has 35 of these in its fleet, with another 55 on order. The airline also has some Embraer E190s and E195s. Those were initially used to launch operations for the airline, but in the meantime, are primarily used for charter services.

My take on Breeze Airways’ financial situation

I’m happy to see that Breeze Airways has finally turned a quarterly operating profit, as that’s a positive milestone. It’s interesting to note just how bad the carrier’s financial situation was for the first couple of years, based on the publicly available data filed with the DOT. For example, in Q3 2023, the airline claimed to have lost nearly $50 million on under $100 million in revenue, for a margin of negative 51%.

So while a quarterly operating profit is good, I’m curious what’s really going on in the background when it comes to the carrier’s financial situation. For example, in January 2024, Cranky Flier had a fascinating guest post, looking at one unusual part of Breeze’s financials. Financial data shared with the DOT provides a breakdown of expenses, and expenses are put into a variety of categories.

These categories include things like salaries, aircraft fuel, maintenance, advertising, and more. One thing that stood out is Breeze had an “other” category of expenses, which in many quarters was the single biggest expense. Yes, bigger than salaries, and bigger than fuel. Meanwhile at virtually all other airlines, that “other” category has close to zero in expenses.

In 2022, that “other” category made up roughly 25% of expenses every quarter, while in 2023, that “other” category made up roughly 33% of expenses every quarter. The consistent percentage of expenses made up by that category each quarter sure makes you wonder what was going on here.

Obviously this is a huge part of Breeze’s financials, yet we don’t actually know what that entails. And suffice it to say that details of that would tell us a big part of Breeze’s financial reality. It’s all very strange.

I can’t help but think that Breeze remains a very attractive acquisition target for another airline that could be looking to grow. I mean, the carrier’s A220 fleet is highly desirable, and I can’t help but feel that a carrier like Delta or JetBlue might be interested in eventually acquiring the airline. That’s not to say that this will ever happen, or that it would get regulatory approval, but it still seems to me like the carrier’s best prospect might be an acquisition.

Bottom line

Breeze Airways has revealed that it turned a quarterly operating profit for the first time in the last three months of 2024. Previously, the airline turned monthly profits in March and April 2024, but this was the first time the company turned a quarterly profit.

It took Breeze quite some time to get to this point, and Breeze has certainly been slower to turn a profit than startup Avelo Air. I’m curious to see how the carrier’s situation evolves, and if Breeze does in fact remain fully independent.

What do you make of Breeze Airways’ financial situation (or at least what we know of it)?