This article is based on an official press release from Avelo Airlines and accompanying industry data.

Avelo Airlines Announces Major Restructuring: Fleet Changes and Base Closures Ahead of 2027 Growth

On January 6, 2026, Avelo Airlines unveiled a comprehensive restructuring plan designed to stabilize its balance sheet and streamline operations. Following the completion of a Series C funding round, described by the carrier as its largest capital infusion since 2020, the airline is initiating a “simplification” strategy. This move involves closing specific crew bases, retiring older aircraft, and ending government charter operations to prepare for a new phase of expansion slated for 2027.

According to the airline’s announcement, these immediate reductions are necessary to bridge the gap between its current Boeing fleet and the arrival of new, more efficient Embraer aircraft. While the carrier reported profitability in four of the five months leading up to July 2025, a significant revenue drop in early 2025 necessitated this strategic pivot.

Fleet Transformation: Retiring the 737-700

A central component of the restructuring is an immediate shift in fleet composition. Avelo confirmed it will remove six Boeing 737-700 aircraft from service. These older models are being phased out in favor of the larger, more fuel-efficient Boeing 737-800s, which will serve as the backbone of the airline’s operations for the remainder of 2026.

This fleet consolidation is a transitional step. The airline explicitly stated that these moves are designed to prepare the infrastructure for the arrival of the Embraer 195-E2. Avelo has firm orders and options for up to 100 of these next-generation regional jets, with the first deliveries expected in early 2027. The E195-E2, with approximately 140 seats, is expected to lower trip costs and allow the airline to profitably serve thinner routes that are challenging for the larger 737s.

Network Changes and Base Closures

The restructuring includes significant changes to Avelo’s network footprint, specifically regarding crew bases. While the airline will continue to serve many of its existing markets, the operational hubs where crews are based will change.

Base Closures and DHS Contract Termination

Effective January 27, 2026, Avelo will close its base in Mesa, Arizona (AZA). This closure coincides with the airline’s decision to terminate its charter contract with the Department of Homeland Security (DHS) and U.S. Immigration and Customs Enforcement (ICE). In its announcement, the airline cited “inconsistent revenue” and “operational complexity” as the primary reasons for ending these government flights.

Additionally, crew bases at Raleigh-Durham (RDU) and Wilmington (ILM) in North Carolina will be closed. However, the airline clarified that these locations will remain open as “spoke” stations, meaning flight service will continue, but crews will no longer be domiciled there.

Future Growth: Dallas/McKinney

Despite the reductions, Avelo confirmed plans for future expansion. The airline announced a new base at Dallas/McKinney (TKI) in Texas, scheduled to open in late 2026. This strategic move aims to position Avelo to tap into the Dallas-Fort Worth market via a secondary airport, avoiding direct competition at the region’s primary hubs.

“The capital is being used to clean up the balance sheet, cover restructuring costs, and bridge the gap until the more efficient Embraer fleet arrives.”

Summary of Avelo Airlines Announcement

Financial Recapitalization

The operational changes are supported by a recently closed Series C funding round. While the exact dollar amount was not disclosed in the summary, the airline characterized it as the “largest single investment” since its initial $125 million Series A in 2020. Avelo claims this recapitalization places its cash position among the strongest in the U.S. airline industry relative to its size.

AirPro News Analysis

We view this announcement as a classic “shrink to grow” strategy, often seen in airlines transitioning between fleet types. By shedding the operational complexity of the DHS contracts and the older Boeing 737-700s, Avelo is reducing its cash burn during a bridge year. The pivot to the Embraer E195-E2 is critical; the 737-800 is often too large for the niche, secondary markets Avelo targets. The success of this restructuring will likely depend on the airline’s ability to maintain customer loyalty in affected markets like Raleigh and Wilmington while waiting for the more efficient Embraer jets to arrive in 2027.

Frequently Asked Questions

Will flights to Raleigh-Durham and Wilmington be cancelled?
While the crew bases are closing, the stations remain open. Flight schedules may be reduced or altered, but service to these cities is not being eliminated entirely.

What happens to passengers booked on cancelled flights?
According to the announcement, near-term schedule changes will affect some itineraries. Impacted customers are being notified via text and email to arrange refunds or rebooking.

Why is the Mesa, AZ base closing?
The Mesa base was heavily tied to the DHS charter operations. With the termination of that contract due to operational complexity, the base is being shuttered on January 27, 2026.

Sources

• Avelo Airlines Press Release