Avelo aircraft.
Source: Avelo
With demand for air travel rising rapidly as the U.S. reopens from the Covid-19 pandemic, Andrew Levy thinks it’s the perfect time to launch a brand new airline.
Levy is the CEO of Avelo, a low-cost provider based mostly in Burbank, Calif., that can start flying in late April to eleven airports and markets in the western U.S. — the place there’s little, if any, direct competitors.
“We see mild at the finish of the tunnel and it’s coming quickly,” Levy advised CNBC as he sat in Avelo’s places of work. “We stand in a fantastic place to get began right here and particularly being up and operating for the Summer peak season, which must be good.”
Levy initially wished to launch Avelo a yr in the past, however the pandemic rapidly put an finish to these plans. So Levy and his crew spent the final yr ensuring Avelo can be prepared when air travel confirmed indicators of coming again. According to International Air Travel Association, the pandemic has value the airline trade greater than $380 billion.
Avelo’s technique is to provide low-fares to vacationers in markets or close to airports which have little airline service. That consists of locations like Grand Junction, Colo.; Eugene, Ore. and Ogden, Utah. These are markets or areas the place vacationers sometimes have to route journeys by way of huge metropolis hubs like Denver or Salt Lake City.
Levy sees large potential exploiting the negatives that go together with bigger airports.
“It takes an extended time to get there, you might have lengthy strains and there are loads of complications and hassles,” he stated. “Small airports, fairly actually, are simply merely a greater expertise and I feel all prospects would agree with that.”
Levy is aware of the small airport technique can repay for a start-up airline, if correctly executed. In the late 1990s, he helped Allegiant Airlines launch service out of small airports like Rockford, Ill., which is roughly an hour northwest of Chicago’s O’Hare Airport. After a number of years serving to Allegiant develop its operations, Levy moved on to United Airlines. There, he rose by way of the ranks and in the end turned CFO earlier than leaving in 2018.
Susan Donofrio, aviation guide FTI Consulting, thinks Avelo can replicate Allegiant’s success.
“While the legacy airways are targeted on leisure progress out of their hubs, this has left loads of alternative on the desk for airways like Avelo to develop unchallenged in underserved markets,” Donofrio stated.
For now, Levy’s focus is on a clear launch with no hiccups that usually hinder start-up firms. Avelo takes off with a fleet of three Boeing 737s and plans to add three extra this summer season. Levy famous he purchased
And becoming of a CEO targeted on low prices, Levy is having fun with the truth he purchased two of the airplanes at a reduction from others in the trade trying to unload plane to save hundreds of thousands of {dollars}.
“The two we bought have been most likely a few third decrease (in value) than they might have been forward of Covid, in order that represented, between the two planes, in the vary of a $15 million low cost,” stated Levy.
