MIAMI – Avelo Airlines (XP) has announced it has raised an additional US$42m in a Series B funding, raising XP’s invested capital base to over US$160m.

While the airline raised US$125 in Series A funding in January 2020, the Series B shares sold at a significant premium.

“This incremental capital is a significant vote of confidence in Avelo’s initial momentum and the enormous opportunity ahead of us,” said Avelo Founder, Chairman and CEO Andrew Levy. “It significantly bolsters our already strong balance sheet and enables the acceleration of Avelo’s growth in 2022 and beyond.”

Andrew Levy, CEO, Avelo Airlines (left) and Tom Cahill, Managing Director and Co-Head of Morgan Stanley Tactical Value. Photo: Avelo Airlines

The Funding

After investing in the Series A offering, an investment fund managed by Morgan Stanley Tactical Value (MSTV) now invested an additional US$30m. This makes MSTV by far Avelo’s largest shareholder.

“The MSTV Investing Team is pleased to again partner with Avelo Airlines on their recent capital raise,” said Tom Cahill, Managing Director and Co-Head of Morgan Stanley Tactical Value, and an Avelo board member. “Andrew and the rest of the Avelo team have done a terrific job in growing the business. Avelo’s recent launch of service from its Tweed-New Haven base is just the latest company success. And the additional capital in place positions Avelo for an even more exciting future.”

According to a press release issued by Avelo, this second-round offering was primarily funded by Series A shareholders. This includes Levy, board members (or the entities they represent), and members of management. Collectively, they invested more than US$34.7m.

Levy added, “The personal investments made by Avelo’s management team and board members exemplify the internal belief in Avelo’s potential.”

Avelo Route Map. Map:

About Avelo

Avelo began service on April 28, 2021, from its first base at Los Angeles’ Hollywood Burbank Airport (BUR). IT currently serves 19 destinations across the U.S. with Boeing Next-Generation (NG) 737 aircraft. Avelo launched its East Coast base at Tweed-New Haven Airport (HVN) on November 3, connecting Southern Connecticut and six Florida destinations.

In 2021, Avelo created over 330 crewmember jobs. It ended the year with six NG 737s (three 737-700s and three 737-800s), flew 345 customers on 3,000 flights, and had a flight completion factor of 99.85. The airline has canceled only seven flights.

In 2022, XP plans to add nine more aircraft, double the number of destinations served, and add more than 450 crewmembers.

Featured image: Avelo Air N802XT Boeing 737-800. Photo: Luca Flores/Airways