By Dean Seal
Avelo Airlines plans to end deportation flights for U.S. Immigration and Customs Enforcement as part of a wider overhaul of its business.
The startup is among low-fare carriers working to sustain their business in the midst of rising operating costs and uneven demand from passengers.
Handling deportation flights put it in the crosshairs of some customers, its own employees and some local government officials. Activist groups staged protests for months near places where it provides service, including Tweed New Haven Airport in Connecticut.
The Houston-based company plans to close its Mesa Gateway Airport operation in Arizona, which served as its hub for chartering deportation flights, on Jan. 27.
Flying for ICE's air-transport program, known as ICE Air, "provided short-term benefits but ultimately did not deliver enough consistent and predictable revenue to overcome its operational complexity and costs," said Courtney Goff, an Avelo spokesperson.
Last year, Chief Executive Andrew Levy said that while the deportation flights were controversial, the company saw them as an opportunity to boost its business. CSI Aviation had a contract with Avelo to handle flights. ICE Air has typically relied on a network of charter operators to deport people.
Avelo operated 1,735 ICE Air charter flights, or around 17% of the total, through the first 11 months of 2025, according to a report from nonprofit group Human Rights First. The flights, which began in May, include removals and transfers to facilities across the U.S. The closely held company declined to share details on revenue generated from flights.
A senior Department of Homeland Security official said it would continue to use its contracted service provider to coordinate deportation flights.
The change in operations was celebrated by some activist groups as well as a union representing airline employees.
"We've faced far too much change at our airline including operating certain flights we didn't originally sign up for," said a statement from the Association of Flight Attendants-CWA chapter representing Avelo flight attendants. "We're hopeful that with the end of the ICE flying and new financing, the future is more stable for flight attendants at Avelo."
Avelo is making changes to its operations beyond dropping deportation flights. It is closing operating hubs and retooling its fleet of planes.
The carrier, which started flying in 2021, said in September that it closed a major financing round that would help it expand across the U.S. and the Caribbean. The company ordered 50 of the plane maker Embraer's jets in a deal valued at $4.4 billion, and obtained rights to buy 50 more. Deliveries are expected to begin in the first half of next year.
Avelo's growth ambitions haven't changed, according to Goff, who said the airline's customer count rose 11% in 2025.
Inflation-related cost increases and shifts in consumer spending have weighed heavily on low-cost airlines, which have been forced to make changes to survive, according to Savanthi Syth, a Raymond James analyst.
The airline closed its hub at Hollywood Burbank Airport in California last year. This month, Avelo said it would close hubs at Raleigh-Durham International Airport and Wilmington International Airport in North Carolina.
The reconfiguration leaves the airline with four operating bases in the eastern U.S., with a fifth in Texas on track to open this year.
The company is shedding six Boeing 737-700 jets from its fleet. Goff said the company is returning the planes to its lessor, which she declined to identify.
The moves are expected to result in job cuts. The number of employees being laid off couldn't be determined.
While some workers might relocate to other bases, "unfortunately, we cannot absorb all impacted crew members into other positions," Goff said. The company ended last year with a little over 1,200 employees.
Employees based at hubs slated to close will be paid through early March, according to the union.
Write to Dean Seal at dean.seal@wsj.com
(END) Dow Jones Newswires
January 10, 2026 09:44 ET (14:44 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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