With demand for air travel growing rapidly as the United States reopens after the Covid-19 pandemic, Andrew Levy believes now is the perfect time to launch a new airline.
Levy is the CEO of Avelo, a low-cost carrier based in Burbank, Calif., Which will begin flying at the end of April to eleven airports and markets in the western United States where direct competition is little or no such thing.
“We see the light at the end of the tunnel and it’s happening soon,” Levy told CNBC as he sat in Avelo’s offices. “We’re in a great place to start here and more importantly to be up and running for the peak summer season, which should be good.”
Levy originally wanted to launch Avelo a year ago, but the pandemic quickly ended those plans. So Levy and his team spent the last year making sure Avelo was ready when air travel showed signs of making a comeback. According to the International Air Travel Association, the pandemic has cost the airline industry more than $ 380 billion.
Avelo’s strategy is to offer advantageous fares to travelers in markets or near airports that have few air services. This includes places like Grand Junction, Colorado .; Eugene, Oregon and Ogden, Utah. These are markets or regions where travelers usually have to make trips through major cities like Denver or Salt Lake City.
Levy sees enormous potential to exploit the drawbacks that come with large airports.
“It takes a long time to get there, you have long lines and there are a lot of headaches and hassles,” he said. “Small airports, quite frankly, are just a better experience and I think all customers would agree with that.”
Levy knows that the small airport strategy can pay off for a start-up airline, if executed properly. In the late 1990s, he helped Allegiant Airlines launch service from small airports like Rockford, Ill., Which is about an hour northwest of Chicago’s O’Hare Airport. After helping Allegiant grow its business for several years, Levy moved to United Airlines. There he rose through the ranks and eventually became CFO before leaving in 2018.
Susan Donofrio, FTI Consulting aviation consultant, believes Avelo can replicate Allegiant’s success.
“As traditional airlines focus on growing leisure activities from their hubs, this has left many opportunities on the table for airlines like Avelo to grow unchallenged in underserved markets,” Donofrio said. .
For now, Levy’s focus is on a clean launch without the hiccups that often gets in the way of start-ups. Avelo takes off with a fleet of three Boeing 737s and plans to add three more this summer. Levy noted that he had purchased
And fitting a low-cost CEO, Levy appreciates the fact that he bought two of the planes at a discounted price from others in the industry looking to offload planes to save millions of dollars.
“The two we bought were probably about a third lower (in price) than they would have been ahead of Covid, which was, between the two planes, a reduction of $ 15 million,” Levy said.
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