In April 2025, it was revealed that low cost carrier Avelo Airlines would start operating deportation flights, as part of an agreement with the Immigration and Customs Enforcement (ICE) division of the Department of Homeland Security (DHS).

From Avelo’s perspective, this was a way to get a steady income stream, in an otherwise challenging market for primarily domestic airlines. As you’d expect, though, this move was controversial, and Avelo faced pushback in many markets. So there’s an interesting update on that front.

Avelo is shrinking its fleet, but planes are going to ICE

This week, Avelo Airlines announced plans to simplify its network and fleet, among a “balance sheet transformation.”

The airline is closing several of its bases, including in Mesa, Arizona (AZA), Raleigh-Durham, North Carolina (RDU), and Wilmington, North Carolina (ILM), and is instead focusing on New Haven, Connecticut (HVN), Wilmington, Delaware (ILG), Concord, North Carolina (USA), and Lakeland, Florida (LAL).

On top of that, the airline is removing six Boeing 737-700s from its fleet, leaving the airline primarily operating Boeing 737-800s.

So here’s where it gets interesting. While Avelo doesn’t highlight this, the fact that its closing its Mesa base makes it pretty clear that the airline is ending deportation flights. The airline didn’t operate any regularly scheduled passenger flights out of Mesa, but instead, that was just the hub for deportation flights.

Remember how the US government recently announced that it purchased six Boeing 737s in order to start its own deportation “airline?” That happens to be the same number of 737s that Avelo is getting rid of.

Enilria flags how the FAA database now shows some former Avelo 737-700s as being owned by Daedalus Aviation Corp, the same company that is supplying ICE with these planes. So that means Avelo is ending deportation flights, and those planes will instead be sold directly to ICE, essentially cutting out the middleman.

I wonder what motivated this deportation flight shift

I’m curious what the story is of Avelo choosing to no longer operate deportation flights:

• Did Avelo decide the optics of these flights were bad, and that it had too negative of an impact on its operations as a standalone regularly scheduled airline?
• Does Avelo get some big upside from this transaction, in terms of selling these planes? These planes were leased in the first place, so I’m not sure if this gives Avelo some big cash injection, or something
• Was the deportation flight contract only for so long, and ICE decided it no longer wanted to work with Avelo on these flights, as it pursued more of a standalone operation?

We don’t know a whole lot about Avelo’s finances, given that the airline isn’t publicly traded. It’s obviously a challenging environment for any airline not named Delta or United (or to a lesser extent Alaska, American, or Southwest), so one wonders…

Bottom line

Avelo Airlines will stop operating deportation flights, as it closes its base in Mesa. Along with this, the airline will get rid of six Boeing 737-700s, in order to simplify its fleet. As it turns out, though, those are the planes that are going directly to ICE, as the government launches “ICE Air.” One wonders what’s causing Avelo to change its strategy here…

What do you think is going on behind the scenes that caused Avelo to stop deportation flights and dump these 737s?