The Donald Trump administration's extensive operation to deport illegal immigrants is providing unexpected new opportunities for low-cost carriers (LCCs) in the United States. This is because LCCs, which have been struggling with declining revenue, are showing movements to enter the business of deporting immigrants to secure stable income sources.
According to The Wall Street Journal (WSJ), the U.S. LCC Avelo plans to use three of its aircraft starting next month to transport illegal immigrants to immigration detention facilities in the U.S. or forcibly deport them abroad. Avelo will deploy aircraft painted white without logos for the deportation of immigrants, and the flights are expected to depart from Mesa, Arizona.
Avelo Airlines, which started operations in 2021 based in Houston, is an LCC mainly flying domestic routes in Connecticut, California, and Florida. Facing serious financial issues, Avelo aims to improve its revenue through the immigrant deportation flight business, WSJ reported.
WSJ noted that "Avelo's participation in the Trump administration's crackdown on illegal immigration is unusual for a private airline and exemplifies the financial difficulties faced by LCCs." Regarding Avelo's financial condition, it was reported that "expenses have exceeded ticket sales revenue, necessitating the company to repeatedly secure funding from investors, and while recent losses seemed nearly covered, financial results deteriorated again in the first quarter of this year."
ICE Air, the air transportation division of the Immigration and Customs Enforcement (ICE) under the Department of Homeland Security, has been contracting charter flights with a brokerage called CSI Aviation in recent years for transporting immigrants. Currently, about 70% of ICE's flights are said to be handled by Global Crossing Airlines, which has operated charter flights for college sports teams and celebrities like Lady Gaga.
The Trump administration has actively used the military for deporting illegal immigrants. However, using military aircraft incurs more expense than operating civilian charter flights, WSJ reported. According to Cartwright's data, there were 134 flights for the deportation of illegal immigrants last month, nearly the same as the same period last year. For large-scale deportations, the Trump administration finds itself in a situation where it needs the assistance of private airlines.
From the perspective of LCCs, securing stable revenue is beneficial. According to WSJ, citing government records, the scale of contracts signed between CSI Aviation and ICE over the past three years amounts to $650 million (about 930.8 billion won). The airline industry assesses that ICE's business guarantees a certain level of flights every month, making it attractive for airlines.
However, there are also critical voices regarding Avelo's participation in the ICE business. After Avelo revealed its plans for charter flights for ICE, employees, customers, and even politicians from areas where Avelo operates have voiced opposition. Given that Avelo's hubs are in progressive regions, it is expected that resistance will intensify once operations begin.
The Connecticut State Assembly, one of Avelo's key hubs, is threatening not to extend the airline's tax exemption that expires in June. Connecticut Attorney General William Tong wrote in a letter to CEO Levy that "flights for the deportation of immigrants are intentionally cruel and represent a waste of taxpayers' money" and stated, "No corporations should be involved in this."
Andrew Levy, CEO of Avelo, recently sent a message to employees acknowledging that "participation in the ICE business is controversial," but concluded, "After extensive discussions, we have determined that this opportunity is too valuable to pass up. This business will help secure our financial stability and allow us to continue operating the company."