Breeze Airways' Big Break: A ULCC Finally Profits

Airline Weekly Lounge Podcast

Note: This episode was recorded prior to the American Eagle collision with a military helicopter on January 29, 2025.

In this episode of the Airline Weekly Lounge, hosts Jay Shabat and Meghna Maharishi analyze the financial performance and strategic direction of American Airlines and Breeze Airways. American Airlines, despite improving its operating margin to 8% in Q4 2024, continues to lag behind United and Delta, facing challenges with international growth, fleet limitations, and regional jet reliance. Meanwhile, Breeze Airways, a young ultra-low-cost carrier, has reported its first profitable quarter, leveraging a premium product strategy and expansion into underserved markets. The discussion highlights American’s struggles to compete globally and Breeze’s progress toward sustainability in the low-cost space. With key insights on fleet choices, network expansion, and industry trends, this episode offers a compelling look into the evolving U.S. airline landscape.

Seven Key Takeaways:

1. American Airlines' Q4 2024 operating margin improved to 8%, but it still trails Delta (12%) and United (11%).
2. American's transatlantic capacity has shrunk by 5% since 2019, while competitors United and Delta expanded aggressively in this market.
3. Fleet challenges, including retired widebody aircraft and delayed Boeing 787 deliveries, have hurt American’s international growth.
4. American remains heavily domestic-focused, relying on regional jets, whereas United is investing in larger aircraft for efficiency.
5. Breeze Airways, founded in 2021, has reported its first profitable quarter, signaling potential stability in the ultra-low-cost carrier market.
6. Breeze differentiates itself with premium seating options and underserved market routes, positioning it ahead of competitors like Spirit and Frontier in customer experience.
7. Charleston, SC, is Breeze’s busiest airport, while Florida remains central to its network strategy, highlighting its focus on leisure travel.

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