Breeze Airways is one of the newest proposed airlines in the U.S. that will soon be gracing the skies. It is taking proactive steps to reach that goal. Breeze Airways is looking to acquire Compass Airlines' operating certificate, according to Bloomberg and a government filing.
Compass Airlines' was a regional carrier that operated for American and Delta Airlines using its fleet of Embraer E175s. However, Delta Airlines terminated its agreement to operate with the carrier in August 2019. This resulted in the removal of 36 of aircraft from Delta's service. With only one partner, combined with the lack of demand due to COVID-19, Compass collapsed on April 7th, operating its last flight from Tulsa to Los Angeles.
On July 6th, Breeze Airways entered an asset purchase agreement with Compass Airlines. There is no comment on the value of the agreement. However, the deal is subject to government approval via the United States Department Of Transportation.
Breeze plans to lease 15 E190s/E195 from Nordic Aviation Capital(NAC), instead of 28 from Azul, citing better terms of contract. Breeze signed the deal on June 19th and is scheduled to be formalized on July 31st. Deliveries of the first aircraft will begin in August 2020 and over the course of the remaining 8 months. Meanwhile, Breeze has deferred its delivery of A220's by 6 months to August of 2021, with one arriving approximately once each month.
If approved, during the first 6 months of operation(November 2020-April 2021), the carrier plans to operate charter flights. Breeze believes that "there is a market opportunity for an operator of narrow-body aircraft with a smaller capacity than incumbent providers." Bloomberg reports that the flights will be based in Minneapolis, the former hub of Compass Airways.
After, Breeze plans to start scheduled service in May-August 2021 on its E190/E195 fleet, pushed back due to the COVID-19 pandemic. Its initial network will consist of flights on the Atlantic Coast, the South, Texas, and the Midwest. By October 2021, the airline plans to start transcontinental service from the "Atlantic Coast" to California using its new A220's. From May to October, the airline plans increase its operation by 50%.
The Salt Lake City-based carrier's main business model has always been to expand to underserved markets in the United States. In the latest government filing, Breeze states these destinations are what people would call the pejorative term "fly-over country." There have been heavy rumors on where they will base their flights. Rumors include destinations like Providence, Fort Worth-Meacham, and Orlando-Sanford, among others.
Breeze plans to acquire additional funding for its venture through the sale of shares to four investors, worth approximately 45 million dollars. Currently, the lead investor predating this investment is David Neelman who owns 82.1% of the company. David Neelman is the man behind airlines like Jetblue, Azul, and Westjet.
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