BURBANK, Calif. — Avelo Airlines, a budget airline, revealed on Monday its plans to shut down its base at Hollywood Burbank Airport and halt all West Coast services by December due to financial difficulties amid fierce market competition.

The airline, which is headquartered in Houston, indicated that it would scale back its Burbank operations to just one aircraft starting August 12, and cease all flights by December 2. This move marks the end of Avelo’s activities on the West Coast, where it conducted its inaugural flight over four years ago.

This development arises as Avelo receives backlash over its partnership with the Department of Homeland Security for deportation flights. Since May, the airline has been executing federal deportation flights from Mesa Gateway Airport near Phoenix under a contract with Immigration and Customs Enforcement (ICE). The agreement with ICE has provoked boycott movements and demonstrations at various airports nationwide. 

The aircraft currently stationed at Burbank will be moved to markets on the East Coast, where the company sees “significantly more opportunity to continue our path to sustainable cash flow generation,” according to the statement.

“We believe the continuation service from BUR in the current operating environment will not deliver adequate financial returns in a highly competitive backdrop,” an Avelo spokesperson said in a statement. The spokesperson said the airline had invested “significant time, resources and efforts” to improve West Coast financial results but had not achieved necessary returns.

The closure will affect all West Coast flights, meaning routes to destinations like Eureka, Calif., Salem, Ore., and other regional airports will end.

Avelo, which launched in 2021 during the pandemic, operates a fleet of older Boeing 737 jets from secondary airports to serve routes ignored by major airlines. The carrier reported its first profitable quarter in late 2023 but has not disclosed detailed financial information.

The airline will continue operating at more than 40 cities across the United States, as well as international destinations in Jamaica, Mexico and the Dominican Republic. Affected customers have been notified about changes to their reservations and refund options.

The Associated Press contributed to this report.