May 14 (Reuters) - Avelo Airlines, a Texas-based budget

carrier, is facing backlash from both customers and employees

over its decision to operate deportation flights under a new

contract with the Trump administration.

President Donald Trump has launched a hardline crackdown on

illegal immigration, including the deportation of Venezuelan

migrants he accuses of being gang members to a maximum-security

prison in El Salvador, and has also detained and moved to deport

some legal permanent U.S. residents. Trump's policies have

triggered a rash of lawsuits and protests.

Avelo, which has been struggling financially, signed a

contract with the U.S. Department of Homeland Security last

month to transport migrants to detention centers inside and

outside the U.S., according to an internal company memo reviewed

by Reuters.

On Monday, the airline flew its first flight under the deal,

from Arizona to Louisiana, data from flight-tracking services

FlightAware and Flightradar24 showed.

Avelo plans to dedicate three aircraft to deportation

operations and has established a charter-only base in Mesa,

Arizona, specifically for these flights, according to the

company memo.

The union representing Avelo's flight attendants called the

contract "bad for the airline," and one customer has organized a

petition urging travelers to boycott the airline.

Avelo is defending its decision.

The airline on Wednesday confirmed its long-term agreement

with U.S. Immigration and Customs Enforcement and said it was

vital to Avelo's financial stability. It also shared a statement

from CEO Andrew Levy acknowledging that it is a "sensitive and

complicated topic," but saying that the decision on the contract

came "after significant deliberations."

The statement added that the deal would keep the airline's

"more than 1,100 crewmembers employed for years to come." Avelo

said it will use three Boeing 737-800 planes in Mesa,

Arizona.

"Flights will be both domestic and international," the

company said, declining to share more details of the agreement.

Avelo, which launched in 2021, was forced to suspend its

most recent fundraising round after reporting its worst

quarterly performance in two years.

In a message to employees last month, Levy said the airline

was spending more than it earned from its customers, forcing it

to seek repeated infusions of capital from investors.

"I realize some may view the decision to fly for DHS as

controversial," Levy wrote in the staff memo, which was reviewed

by Reuters, but said the opportunity was "too valuable not to

pursue."

"THE HELP OF CORPORATES"

The Association of Flight Attendants-CWA, which represents

Avelo's crew, has urged the company to reconsider its decision,

which it said would be "bad for the airline."

"Having an entire flight of people handcuffed and shackled

would hinder any evacuation and risk injury or death," the union

said. "We cannot do our jobs in these conditions."

The Trump administration has deported hundreds of migrants

labeled as Venezuelan gang members to El Salvador. Photos and

videos have shown deportees in handcuffs and shackles.

Customers have also expressed outrage. Anne Watkins, a New

Haven, Connecticut, resident, said she has stopped flying with

Avelo. She launched an online petition urging travelers to

boycott the airline until it ends its ICE flight operations. The

petition has garnered more than 38,000 signatures.

Watkins, 55, also organized a candlelight vigil on Monday to

mark the launch of Avelo's deportation flights.

"Companies can decide to operate in wholly ethical and

transparent ways," she said. "Avelo is not choosing to do that

right now."

Connecticut Attorney General William Tong, a Democrat, has

threatened to review the state's incentives for Avelo, which has

received over $2 million in subsidies and tax breaks.

In California, Los Angeles resident Nancy K has co-founded a

campaign called "Mothers Against Avelo." She plans to lead

weekly protests every Sunday in May at Hollywood Burbank

Airport, one of Avelo's six operating bases.

"It's important to not only look at Trump because he's not

really doing anything alone," she said. "He's doing it with the

help of corporates."