An airline industry debate involving HPN: Breeze Airways: a start-up still finding its financial way?

August 9, 2023 at 11:04 p.m.

Breeze Airways was welcomed to HPN with a full firetruck waterspout on June 22, 2022 when their first scheduled flight (from Charleston, S.C.—and then back again) arrived and shortly thereafter departed. Their upcoming HPN schedule features Charleston and Norfolk, Va. and this winter Vero Beach, Fla. (Dick Hubert/Westmore News)

Is “Breeze Airways Losing Massive Amounts of Money” as the web blogger Ben Schlappig writes on his site www.onemileatatime.com?  

And what does Breeze Airways Director, External Communications & Media Relations Gareth Edmondson-Jones have to say about that report?

Blogging sites are where this newspaper first learned that Breeze was dropping its popular White Plains (HPN) to Los Angeles (LAX) route via its new A-220-300 aircraft because they were not making money on the trip. How Breeze is doing is of concern to those who fly its routes out of the County airport (HPN).

Schlappig marshalled major evidence to support his headline.

He wrote:

“Breeze isn’t publicly traded, so we don’t get detailed financials. However, even privately owned airlines have to submit a Form 41 Financial Schedule with the US Department of Transportation (DOT), which has all kinds of fascinating details.

The website enilria.com has a detailed look at just how bad Breeze’s financials are. Let’s just take a look at Breeze’s revenue and operating expenses for five consecutive quarters from Q1 2022 to Q1 2023:

In Q1 2022, the airline had revenue of $17,194,380 and expenses of $38,221,230, for a loss of $21,026,850, and an operating margin of -122%

In Q2 2022, the airline had revenue of $28,113,070 and expenses of $64,617,250, for a loss of $36,504,180, and an operating margin of -130%

In Q3 2022, the airline had revenue of $34,470,200 and expenses of $72,366,360, for a loss of $37,896,160, and an operating margin of -110%

In Q4 2022, the airline had revenue of $55,574,110 and expenses of $86,233,630, for a loss of $30,659,520, and an operating margin of -55%

In Q1 2023, the airline had revenue of $67,378,610 and expenses of $115,400,500, for a loss of $48,021,890, and an operating margin of -71%

Admittedly it takes some time for an airline to establish itself, and it’s expected that an airline will lose money for some amount of time after launch. That’s one of the reasons the airline raised over $300 million in capital to launch operations. By my math, the airline had an operational loss of around $175 million over the course of five quarters, which is a lot. That means the carrier has burned through nearly two-thirds of its startup capital in those quarters alone.”

The Breeze response

In response, Edmondson Jones puts Breeze Airways’ best foot forward. He e-mailed:

"Breeze is just over 2 years old and is continuing to make solid progress towards achieving our profitability and growth goals by providing underserved markets such as Westchester County with affordable and efficient flight options. We believe Breeze is in a category of its own which is why, this past May, we introduced the category term 'NLCC'—or Nice Low Cost Carrier—highlighting our elevated perks such as premium seating, no change and cancelation fees, and free family seating. By staying focused on efficiency and giving our Guests the most seamless experience possible, we will continue redefining what it means to be 'Seriously Nice' in this new era of air travel."

Edmondson-Jones also wrote that Schlappig “takes a few numbers and jumps to a lot of erroneous conclusions. But, as a private company, we're not going to go line by line and explain where he got it wrong."

Edmondson-Jones wouldn’t get more detailed on Schlappig’s “erroneous conclusions.” Schlappig did say the following in summation:

“I don’t know how things are going to play out with Breeze. However, the carrier constantly launching and then canceling routes, combined with the airline now having racked up nearly $200 million in operational losses, isn’t a good sign.

It’s interesting that Breeze has increasingly been using some of its planes for sports charters. That’s unlikely to make the airline a ton of money, but it should at least help with minimizing losses, since it’s reliable revenue. At a minimum, it should buy the airline some time.

Unless something drastically changes soon (I guess we’ll see the Q2 2023 numbers), the airline will either need more capital, or will have to do something. The airline is expected to take delivery of an average of one new Airbus A220 every month, and I’m curious if that happens as planned…”

Is the future of air travel
at HPN up in the air?

What the “new era of air travel” will be at least as far as HPN is concerned is a major and still unanswered question.

The airport administration was shocked when after decades of presence United Airlines pulled up stakes and left HPN for good June 30.

The County is fighting JSX which is operating flights from HPN to Miami on aircraft seating 30 passengers—aircraft which are leaving from private terminals and not the main commercial terminal, where they would be subject to its Terminal Use Regulations.

As County Attorney John Nonna told the Westmore News in May:

“The County is in Federal Court challenging JSX’s ability to flout the terminal use regulations that require them to operate from the terminal. We have agreed to await the Court’s decision on whether our terminal use conditions apply to them, and contrary to JSX’s position, we believe they are an airline under the County’s terminal use regulations. We believe they meet the definition of an airline.”

The definition of an airline, and the financials that keep an airline in business, remain the HPN questions of the hour.

In the meantime, Breeze is anxious to remind local travelers that it will start daily service to Vero Beach from HPN this winter.