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New airline Avelo thinks it is the proper time to start out flying as journey 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 based mostly in Burbank, Calif., that may begin flying in late April to eleven airports and markets within the western U.S. — the place there’s 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 places of work. “We stand in an incredible place to get began right here and particularly being up and working for the Summer season peak season, which ought to be good.”

Levy initially needed to launch Avelo a 12 months in the past, however the pandemic rapidly put an finish to these plans. So Levy and his workforce spent the final 12 months ensuring Avelo could be prepared when air journey confirmed indicators of coming again. In keeping with Worldwide Air Journey Affiliation, 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 features locations like Grand Junction, Colo.; Eugene, Ore. and Ogden, Utah. These are markets or areas the place vacationers sometimes should route journeys by means of huge 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’ve got lengthy traces and there are quite a lot of complications and hassles,” he stated. “Small airports, fairly actually, 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, Unwell., 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 means of the ranks and finally 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 targeted on leisure development out of their hubs, this has left quite a lot 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 targeted on low prices, Levy is having fun with the very fact he purchased two of the airplanes at a reduction from others within the business trying to unload plane to save lots of thousands and thousands of {dollars}.

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