It’s worse than the public was first led to believe.
It turns out that the $850,000 federal grant used to lure (bribe?) Breeze Airways to set up shop at Arnold Palmer Regional Airport in Westmoreland County came with a condition:
In order to receive the federal tax dollars, another $500,000 in state tax dollars had to be thrown into the pot.
As the Tribune-Review reported it last week:
“An eager customer base looking to travel to leisure destinations in South Carolina and Florida wasn’t enough for the Westmoreland County Airport Authority to land a new low-cost commercial carrier at Arnold Palmer Regional Airport.
“It took more than $1.3 million in government funding to seal a deal with Utah-based Breeze Airways,” reporter Joe Napsha writes.
That would be $1.35 million to be exact.
And the dive into taxpayer pockets might not be over yet, given that departed, liquidated Spirit Airlines also had the cost of ticketing and gate agents and baggage folks covered by John and Jane Q. Public.
Expect past to be prologue for Breeze’s operations, though the Trib also reports that the “state funding will help pay for set-up costs and other as-yet-to-be-identified expenses associated with Breeze’s service.”
So, why wasn’t the additional corporate wealthfare component announced from the get-go? Was it that the already bad-looking optics would have looked even worse had there been full disclosure up front? The delayed disclosure assured that.
Breeze is a private company (though there is some talk of going public next year). But it does report its financials to the U.S. Department of Transportation (DOT). And as DWU Consulting LLC reported in a Sept. 18 assessment (in which it discloses artificial intelligence (AI) was used to help generate it), a brief period of profitability “has not held” for the airline.
From the DWU report:
“Breeze reported an operating profit in each of the three quarters from Q4 2025 through Q2 2026 — $26.7 million on $398.2 million of revenue in Q2 2026, a 6.7 percent margin — but net losses of $68.0 million in Q4 2025 and $29.1 million in Q2 2026, around a $2.6 million net profit in Q1 2026.
“Non-operating charges made the difference: ‘other income, net’ was a loss of $80.5 million in Q4 2025 and $42.7 million in Q2 2026, and [DOT] Form 41 does not say what those charges were.
“Over the four quarters to June 2026, Breeze earned $34.7 million of operating profit on $1.25 billion of revenue and lost $126.1 million after non-operating items,” again, according to company-reported Form 41 figures, not audited public-company statements, the DWU/AI analysis notes.
The extra $500,000 in public money came from those mavens of public accountability at the Pennsylvania Department of Community and Economic Development’s (DCED) community revitalization program.
But what kind of due diligence did DCED perform regarding Breeze’s financials? What kind of due diligence did the federal DOT do? And why should federal and state taxpayers have their wallets tapped to prop up such an operation – especially if there’s such an “eager customer base looking to travel” to Myrtle Beach and Orlando? Wouldn’t such demand cover Breeze’s costs and allow it to turn a profit?
Back to that DWU Consulting report:
“Breeze’s strategy is more specific than ‘another low-cost carrier.’ The airline is betting that a modern, right-sized narrow-body — the A220-300 — combined with a ‘nice’ premium-leisure product and disciplined avoidance of head-to-head competition can profitably serve thin point-to-point markets that the legacies and the ultra-low-cost carriers (ULCCs) systematically under-serve.
“The thesis rests on three linked claims: that a large pool of origin-and-destination (O&D) demand is stranded in secondary cities where no carrier finds a route worth flying; that the A220’s seat economics and range make those markets viable at demand levels a 180-seat mainline jet cannot justify; and that a modest premium cabin and bundled fares can lift yield without importing a full-service cost structure. In [Breeze owner David] Neeleman’s framing, the large majority of Breeze routes have no nonstop competitor — which makes the airline less a pure ULCC than a yield-management play built on geographic white space [bold-faced emphasis in the original].”
Continues the DWU report:
“The core tension is scale versus fragility. Thin markets are attractive precisely because larger carriers ignore them, but they also mature slowly, carry thin absolute demand ceilings, and offer little natural density for frequency or connections. Rapid fleet growth therefore demands a constant pipeline of new routes and a tolerance for pruning the ones that never thicken — Breeze dropped roughly 18 domestic routes between January 2025 and May 2026 even as it launched many more.
“And every extension of the model — international flying, global-distribution-system (GDS) participation, richer loyalty, a larger base footprint, a deeper premium offer — is individually sensible yet cumulatively nudges a niche carrier toward the overhead and customer expectations of a much broader one.
“Whether the model works is less about whether individual routes can be profitable and more about whether the portfolio can generate enough free cash flow to self-fund growth before private capital tightens.”
Most of the public money in the Breeze deal is designed to be tapped by the airline should its passenger projections not be reached. But as we’ve noted before, isn’t that an incentive to not reach passenger goals, offloading the risk onto taxpayers over the life of this two-year deal?
The bottom line is that taxpayers have absolutely no business covering what the DWU report says is Breeze’s “bet.”
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
