New airline Avelo thinks it is the right time to start out flying as journey picks up

Avelo airplane.

Supply: Avelo

With demand for air journey rising rapidly because the U.S. reopens from the Covid-19 pandemic, Andrew Levy thinks it is the right time to launch a brand new airline.

Levy is the CEO of Avelo, a low-cost service primarily based in Burbank, Calif., that can begin flying in late April to eleven airports and markets within the western U.S. — the place there may be little, if any, direct competitors.

“We see mild on the finish of the tunnel and it’s coming quickly,” Levy advised CNBC as he sat in Avelo’s workplaces. “We stand in an amazing place to get began right here and particularly being up and working for the Summer season peak season, which needs to be good.”

Levy initially needed to launch Avelo a yr in the past, however the pandemic rapidly put an finish to these plans. So Levy and his workforce spent the final yr ensuring Avelo can be prepared when air journey confirmed indicators of coming again. In keeping with Worldwide Air Journey Affiliation, the pandemic has value the airline trade greater than $380 billion.

Avelo’s technique is to supply low-fares to vacationers in markets or close to airports which have little airline service. That features locations like Grand Junction, Colo.; Eugene, Ore. and Ogden, Utah. These are markets or areas the place vacationers usually should route journeys via massive metropolis hubs like Denver or Salt Lake Metropolis.

Levy sees large potential exploiting the negatives that go together with bigger airports.

“It takes a very long time to get there, you might have lengthy strains and there are a variety of complications and hassles,” he mentioned. “Small airports, fairly truthfully, are simply merely a greater expertise and I believe all prospects would agree with that.”

Levy is aware of the small airport technique can repay for a start-up airline, if correctly executed. Within the late Nineties, he helped Allegiant Airways launch service out of small airports like Rockford, In poor health., 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 Airways. There, he rose via the ranks and in the end grew to become CFO earlier than leaving in 2018. 

Susan Donofrio, aviation advisor FTI Consulting, thinks Avelo can replicate Allegiant’s success.

“Whereas the legacy airways are centered on leisure development out of their hubs, this has left a variety of alternative on the desk for airways like Avelo to develop unchallenged in underserved markets,” Donofrio mentioned. 

For now, Levy’s focus is on a clear launch with no hiccups that always hinder start-up corporations. Avelo takes off with a fleet of three Boeing 737s and plans so as to add three extra this summer time. Levy famous he purchased

And becoming of a CEO centered on low prices, Levy is having fun with the very fact he purchased two of the airplanes at a reduction from others within the trade seeking to unload plane to save lots of thousands and thousands of {dollars}.

“The 2 we bought have been most likely a few third decrease (in worth) than they might have been forward of Covid, in order that represented, between the 2 planes, within the vary of a $15 million low cost,” mentioned Levy.

https://www.cnbc.com/2021/04/08/new-airline-avelo-thinks-its-the-perfect-time-to-start-flying-as-travel-picks-up.html