New airline Avelo thinks it’s the perfect time to start flying as travel picks up

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Avelo aircraft.

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 proper time to launch a brand new airline.

Levy is the CEO of Avelo, a low-cost provider 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 gentle on the finish of the tunnel and it’s coming quickly,” Levy informed CNBC as he sat in Avelo’s places of work. “We stand in an awesome place to get began right here and particularly being up and working for the Summer season 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 workforce spent the final yr ensuring Avelo could be prepared when air journey confirmed indicators of coming again. Based on Worldwide Air Journey Affiliation, the pandemic has price 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 by massive metropolis hubs like Denver or Salt Lake Metropolis.

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

“It takes a very long time to get there, you may have lengthy traces and there are loads of complications and hassles,” he stated. “Small airports, fairly truthfully, are simply merely a greater expertise and I feel all clients 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, Ailing., 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 by the ranks and finally turned CFO earlier than leaving in 2018. 

Susan Donofrio, aviation guide 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 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 corporations. Avelo takes off with a fleet of three Boeing 737s and plans so as to add three extra this summer season. 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 trying to unload plane to avoid wasting tens of millions of {dollars}.

“The 2 we bought had been in all probability a few third decrease (in value) 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,” stated Levy.


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