Avelo Airlines Expands into New Markets — What This Means for Investors in 2025

As the U.S. travel industry continues to rebound in 2025, budget airlines are gaining more attention from both travelers and investors. Avelo Airlines is one such carrier making waves with a new base at McKinney Regional Airport and a unique strategy focused on offering affordable flights from smaller airports. This move isn't just about convenience—it's a calculated play in a market where cost-conscious travelers and underutilized airports are creating new opportunities. For investors, the key question is: How much potential does Avelo have, and what should you be watching in this evolving industry?

Avelo's New Base at McKinney Airport

Avelo Airlines has become the first carrier to establish a presence at McKinney Regional Airport, which is undergoing a $79 million terminal expansion. The airport is projecting that Avelo will initially serve 130,000 passengers per year at this location, and the project is expected to generate a $1 billion economic impact over time.

This development highlights how smaller airports are becoming key players in the aviation market, offering lower operating costs and the potential for faster growth compared to major hubs according to reports.

For Avelo, this represents a strategic move into a market where it can leverage lower costs to offer competitive fares and tap into a growing base of budget-conscious travelers. The airline is also likely to benefit from introductory fares offered on new routes in the first six to 12 months, which can further boost its appeal.

Why Secondary Airports Are Gaining Ground

Flying out of secondary airports like McKinney is becoming more attractive for a variety of reasons. These airports typically have lower operating costs, shorter security lines, and often lower ticket prices. Airlines such as Avelo, Allegiant, Spirit, and Frontier have all capitalized on this trend, offering up to 50% less in fares compared to flights from major airports according to travel experts.

This shift is not just about saving money. For travelers, it's about convenience and flexibility. For airlines, it's about optimizing costs and reaching underserved markets. As more secondary airports expand and attract new carriers, Avelo's model could become a blueprint for future growth in the sector.

The Competitive Landscape and Investor Implications

The budget airline sector is becoming increasingly competitive, and Avelo is just one player in a crowded field. However, its recent expansion and strategic use of secondary airports position it as a company that is adapting to changing market dynamics. For investors, the key is to assess whether Avelo's strategy can translate into sustainable growth and profitability.

One of the main advantages of Avelo is its ability to offer lower fares by minimizing operational costs. This is particularly relevant in an environment where travelers are still cautious with their spending and price sensitivity remains high. Moreover, the trend toward international airfare drops in 2025—driven by increased airline capacity—suggests that the overall market is becoming more competitive.

That said, investors should be mindful of the challenges. For example, destinations like the Caribbean and Mexico have seen price increases, while less-traveled locations offer more value. Avelo's success will depend on its ability to position itself in the right markets and maintain its cost advantages while scaling up its operations according to market analysis.

What's Next for Avelo and the Low-Cost Airline Sector

Looking ahead, Avelo will need to continue building its brand and expanding its route network. The McKinney expansion is just one step in what could be a broader strategy to establish a presence in other underutilized airports across the country. At the same time, the company will need to balance growth with financial discipline, ensuring that its cost structure supports long-term profitability.

For investors, the broader picture is that the low-cost airline sector is evolving. Companies that can adapt to new consumer behaviors, leverage technology, and maintain cost advantages are likely to thrive. Avelo's recent moves suggest it is on the right track, but it will need to keep innovating and expanding to stay competitive in a sector where margins can be thin.

Still, with the right strategy and execution, Avelo could be well-positioned to benefit from a long-term shift in how Americans travel. That's something worth watching as the year closes and 2026 approaches.