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Compass Airlines, Breeze Aviation File to Transfer DOT Certificate
Compass Airlines and Breeze Aviation Group have jointly filed with the U.S. Department of Transportation (DOT) for the transfer of Compass’ Certificate of Public Convenience and Necessity to Breeze. If finalized, the transfer would allow Breeze to engage in “interstate scheduled air transport,” per the DOT filing seen by AirlineGeeks.
“By utilizing Compass’s manuals, resources, and processes, FAA certification will be completed more efficiently and, accordingly, the introduction of new service to underserved markets will be accelerated,” Breeze argued in the filing. “This in turn will result in the hiring of aviation workers and a more rapid recovery from the COVID-19 pandemic.”
Breeze, a startup airline launched by JetBlue founder David Neeleman, originally applied for an operating certificate in February of this year, though it faced setbacks as the Coronavirus pandemic hit the United States soon after.
The most recent filing was made on July 9, and it was requested that the application be reviewed expeditiously so the certificate can be used as soon as possible. Breeze anticipates starting services on October 15, 2020 with Embraer ERJ-190/195 aircraft, per the filing.
Breeze argues that the certificate’s transfer is of public interest since Compass is not using the certificate after ceasing operations in April. Breeze says that its plan of focusing on underserved routes and markets will facilitate travel and economic development between and in smaller communities, thereby boosting economies, creating jobs and expediting recovery from the coronavirus pandemic whenever that recovery may come.
Breeze says it has been “actively working through the process of establishing an airline” and plans first to introduce charter air transport this year before launching scheduled services in 2021.
Breeze and Compass reached an Asset Purchase Agreement on July 6, just days before filing to transfer the certificate. The agreement will allow Breeze to acquire Compass assets that permitted Compass to exercise its Certificate and will allow Breeze to do the same. Compass will not transfer any of its international authorities, instead simply giving Breeze the resources necessary to operate interstate flights in the United States. This includes access to the operating authority that will let Breeze operate the ERJ-190/195 aircraft.
“Breeze has adjusted its plans accordingly to both account for shifts in demand and take advantage of opportunities [in response to the COVID-19 pandemic],” the filing says. “Instead of operating charter services for three months before introducing scheduled services in the winter of 2020 as contemplated in our February Application, Breeze will initially operate charter services for six months before entering scheduled service in May of 2021.”
Breeze will be based in Minneapolis, Minn. and will take delivery of its first Airbus A220s, which will serve as the backbone of its long-term fleet, in August 2021. In the meantime, it will lease fifteen ERJ-190 from Nordic Aviation Capital.
Breeze has raised $4.2 million since its original February application in addition to the original financing provided by Neeleman. The airline is currently trying to raise an additional $45 million by selling shares to about four other investors.
Neeleman expects that his business model of targeting underserved routes in the U.S. will majorly disrupt the American market.
“I don’t start an airline just for the sake of starting,” Neeleman said after officially launching the airline earlier this year. “There’s a need in the United States. You know, the route system of the other airlines is focused really on hubs rather than spokes.”
Neeleman has seen considerable success introducing major airlines in markets around the world. Besides JetBlue, he launched low-cost Morris Air on the U.S. West Coast; Canada’s WestJet, which has grown to be a major player in the Canadian industry; and Brazil’s Azul, which broke up a major duopoly in the Brazilian market.
“There is no greater teacher than experience,” Neeleman said after the February launch, touching on the airline industry veterans he has hired to lead Breeze. “We just have a lot of experience.”
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