Avelo aircraft.
Source: Avelo
With demand for air travel rising shortly 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 primarily based in Burbank, Calif., that can start flying in late April to eleven airports and markets in the western U.S. — the place there may be little, if any, direct competitors.
“We see light at the end of the tunnel and it is coming soon,” Levy informed CNBC as he sat in Avelo’s workplaces. “We stand in a great place to get started here and especially being up and running for the Summer peak season, which should be good.”
Levy initially needed to launch Avelo a yr in the past, however the pandemic shortly put an finish to these plans. So Levy and his group spent the final yr ensuring Avelo could be prepared when air travel confirmed indicators of coming again. According to International Air Travel Association, the pandemic has price the airline business 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 contains locations like Grand Junction, Colo.; Eugene, Ore. and Ogden, Utah. These are markets or areas the place vacationers usually have to route journeys via large metropolis hubs like Denver or Salt Lake City.
Levy sees huge potential exploiting the negatives that go together with bigger airports.
“It takes a long time to get there, you have long lines and there are a lot of headaches and hassles,” he stated. “Small airports, quite honestly, are just simply a better experience and I think all customers 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 via the ranks and in the end turned CFO earlier than leaving in 2018.
Susan Donofrio, aviation marketing consultant FTI Consulting, thinks Avelo can replicate Allegiant’s success.
“While the legacy airlines are focused on leisure growth out of their hubs, this has left a lot of opportunity on the table for airlines like Avelo to grow unchallenged in underserved markets,” Donofrio stated.
For now, Levy’s focus is on a clear launch with no hiccups that usually hinder start-up corporations. Avelo takes off with a fleet of three Boeing 737s and plans to add three extra this summer time. 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 business trying to unload plane to save tens of millions of {dollars}.
“The two we purchased were probably about a third lower (in price) than they would have been ahead of Covid, so that represented, between the two planes, in the range of a $15 million discount,” stated Levy.
