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Avelo Airlines is taking an axe to one of its core promises. Effective Friday, the nearly four-year-old ultra-low-cost carrier will institute change and cancellation fees for its flights.

The move will end a “hassle-free travel” promise that’s been a central tenet of the airline’s branding. Until this week, it was common to find a banner reading “No change or cancellation fees” right at the top of the homepage for Avelo’s website.

The move is part of an effort to boost finances for the young airline and deter what it says are costly last-minute cancellations on the part of travelers.

There’s also a key — and inexpensive — caveat that can allow travelers to maintain plenty of flexibility in their Avelo travels: a $5 flex pass that buys customers “free” ticket changes and cancellations.

Avelo’s changes come as the carrier, for the first time, revealed to TPG that it is deep into plotting its first loyalty program, along with a cobranded credit card. Both are expected to launch over the coming months.

Here’s what to know about the changes you’ll see at Avelo this week, throughout the spring and later in 2025.

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Does Avelo have change fees?

In a move travelers will likely bemoan, Avelo plans to implement change or cancellation fees beginning on Friday, March 7.

Itinerary changes or cancellations will be free two months or farther ahead of departure, but then will climb closer to travel day.

While some airlines have historically employed flat fees for changes, and others a more dynamic pricing model, Avelo is taking a slightly different approach. A customer’s change or cancellation fee will be charged as a percentage of what they paid — both for their base fare and for add-on purchases like bags and seats.

Avelo change fees

Here’s how the pricing will work for Avelo cancellations and changes, effective March 7:

So, let’s say you paid $45 for a one-way flight from New Haven to Orlando, plus $90 in bag and seat fees, for a total of $135.

If you decided, three days before your trip, that you needed to cancel or make an itinerary change, you’d get a trip credit from Avelo for 50% of what you paid — or $67.50, in this case.

Had you made the change three hours before your flight, you’d only receive $33.75, a quarter of what you paid.

However, there’s a way you can skirt the risk of a change or cancellation fee.

Pick a seat: First look inside and where to sit on Avelo’s Boeing 737-800 

AveloFlex: $5 for ‘free’ changes

Avelo on Friday will also launch a new add-on option it’s calling “AveloFlex.”

For $5, you can essentially buy yourself the ability to make “free” ticket changes or cancellations if a problem arises.

It’ll cost you $5 per person, per segment, so if you had two travelers making a trip that included a connecting flight (however uncommon on Avelo), you’d pay $10 per traveler, for a total of $20.

While it’s just one more add-on to the budget airline experience that already includes plenty, it’s a fairly nominal cost to avoid the risk of a much larger fee if a problem comes up — and less than you’d likely pay for a full travel insurance policy.

Cutting down on spoiling inventory

Still, adding change and cancellation fees is likely to be a disappointing move for customers, the carrier’s chief commercial officer, Brian Davis, noted in a memo to staff viewed by TPG.

The move was simple economics, Davis said, since Avelo operates many of its routes just a few times per week — meaning that it sees empty seats as a financial liability.

“When we offer changeability to all customers all the time, there’s a meaningful cost to that, because there’s some number of people who wait until the very last minute and then cancel, and we’re left with a seat we can’t resell,” Davis told TPG in an interview this week. “To the customers who really value flexibility, we want to continue to make that available to them, as well, with a clear choice and a nominal price point.”

Avelo’s move toward change fees comes just weeks after Spirit Airlines did the same on its most basic fares — a move that came after it and Frontier Airlines took their biggest strides away from such fees in sweeping moves last year.

And while the largest U.S. airlines have long-since ditched change fees on full-fare economy tickets, plenty of restrictions remain for most of the large carriers’ basic economy fares.

“There was a movement immediately post-COVID away from change fees,” Davis noted. “But that has significantly moved back, particularly across the lowest price point kind of fare that we would view as our competition across the different carriers.”

Avelo loyalty program is coming soon

While customers aren’t likely to celebrate Avelo’s move this week, they may be more keen on other big changes in the works at the carrier, which launched operations during the coronavirus pandemic in 2021.

The airline is weeks away from announcing its first loyalty program, Davis confirmed. And Avelo recently reached a tentative agreement with an issuer to launch a cobranded credit card program later this year.

It’s a big shift for the airline: As recently as late-summer 2024, Avelo executives had told me that talk about a loyalty program had not reached any sort of advanced stage — this, as fellow startup carrier Breeze launched a card last year.

But now, Avelo is “actively” building a program, Davis said, with plans to announce details within weeks.

Read more: Getting started with points, miles and credit cards to travel

What should customers expect?

What type of perks will the program offer?

“It’s certainly not a frequent flyer program,” Davis said, leaving little more than breadcrumbs.

“We think about this as the low-frequency traveler who — value is really important to them,” he explained. “This is an opportunity [to be] a part of our club, a cardholder, and all year long when you’re buying your gas and your groceries and you’re engaging in your day-to-day activities, you’re earning a bank of value that is super powerful and exciting for you then to daydream with your family about the next vacation that you can take.”

About those change fees …

Don’t be surprised if Avelo uses its new change fees to create something of a market for its loyalty program (and perhaps its credit card), either.

“We would certainly imagine flexibility would be one of the benefits,” Davis said.

We should note, Avelo already has a limited partnership with Capital One that offers a few benefits to travelers — but the upcoming loyalty and card programs should go well beyond that.

Budget airlines aim for piece of pie

How different might an Avelo loyalty and card program look from its competitors? We’ll be eagerly awaiting the rollout.

Budget airlines have leaned more heavily into loyalty programs and cobranded credit cards in recent months, aiming to claim even a small piece of a lucrative pie that’s propelled profits for many of the larger carriers.

Frontier Airlines recently announced its cobranded credit card applications had spiked by 25% after the carrier announced plans for first-class seats and a companion pass for high-level Frontier Miles elite status members, launching later this year.

Related reading:

• The best airline credit cards
• What exactly are airline miles, anyway?
• 6 real-life strategies you can use when your flight is canceled or delayed
• Maximize your airfare: The best credit cards for booking flights
• The best credit cards to reach elite status
• What are points and miles worth? TPG’s monthly valuations