The head of a low-cost airline drops hints about IPO

The chief executive said that there 'could be a window for that.'

Jun 10, 2025 - 18:02

The head of a low-cost airline drops hints about IPO

While the last year saw a number of airline bankruptcies including the high-profile turnaround of Spirit Airlines (SAVE) , some carriers have also felt confident enough to go public.

On June 4, Virgin Australia reversed its five-year absence with a A$685 million (roughly $443 million USD) initial public offering (IPO), while Saudi Arabian budget airline Flynas raised 4.1 billion riyals ($1.1 billion USD) in a sold-out IPO.

Executives from WestJet have also recently fueled rumors that an IPO may be somewhere on the horizon; Canada's second-largest airline was taken private by equity firm Onex in 2019.

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'There could be a window for that': Breeze Airways CEO

As founder and chief executive of Breeze Airways, David Neeleman has made the most vocal commitment yet about the public future of the budget airline based outside of Salt Lake City.

In an interview with aviation website Skift, Neeleman said that this could happen as soon as 2026 under favorable market conditions.

"I think if by next year, if there's a rebound in equities, there could be a window for that," Neeleman said.

Established in 2018 and running its first flights in 2021, Breeze quickly found a market with flights both between smaller U.S. cities underserved by larger airlines and to popular vacation destinations. Some of its destinations include New York's Islip, Ohio's Akron, and California's Orange County.

Neeleman was at the forefront of the last two decades' explosion of the low-cost model by founding budget airlines that later ended up going public. These include WestJet, JetBlue Airways (JBLU) , and Azul Brazilian Airlines (AZUL) , among others.

In the last quarter of 2024, Breeze reported a 78% increase in revenue from the same quarter in 2023. It is currently also seeking regulatory approval to start running flights to nearby international destinations in the Caribbean and potentially even certain transatlantic routes.

Breeze Airways is currently seeking approval to start running flights to new international destinations in the Caribbean.
Image source: Norfolk International Airport/Twitter

Some low-cost airlines are profitable, while others are not (here's the catch)

In a December 2024 interview with TheStreet, Neeleman questioned whether the low-cost model had hit its limits, as too much competition makes it necessary for carriers to win over travelers with more premium features.

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"The million-dollar question is, 'Will it be enough to make the ultra-low-cost-carriers in particular profitable again?'" Neeleman told TheStreet. "[...] Let me go with a no-bag fare, but if I want to pay for a first-class seat, let me pay for a first-class seat. Give me options."

Hit by an ever more competitive market and rising costs of operations, most U.S.-based budget airlines have taken losses in the first quarter of 2025. Those that managed to withstand the ebb had to drastically rework their business model to get closer to full-service airlines.

Others, like Breeze, serve a unique market of travelers who do not have access to another carrier.

"The big differentiator will be airlines that have healthier balance sheets overall," TD Cowen analyst Tom Fitzgerald told TheStreet in April 2025. "[...] The legacies also have pretty attractive loyalty programs that are generating billions in revenue at very high margins."