Avelo plane.
Source: Hazel
With the demand for air travel growing rapidly as the United States reopens the Covid-19 pandemic, Andrew Levy believes it is the perfect time to launch a new airline.
Levy is the CEO of Avelo, a low-cost company based in Burbank, California, which will begin flying in late April to eleven airports and markets in the western United States, where there is little direct competition. if there are any.
“We see light at the end of the tunnel and it will come soon,” Levy told CNBC as he sat in Avel’s offices. “We’re in a great place to start here and most importantly be up and running for the high summer season, which should be good.”
Levy wanted to launch Avelo a year ago, but the pandemic quickly put an end to those plans. So Levy and his team spent the last year making sure Avelo would be ready when the plane trips showed signs of return. According to the International Air Travel Association, the pandemic has cost the airline more than $ 380 billion.
Avelo’s strategy is to offer low fares to travelers at markets or near airports with little air service. This includes places like Grand Junction, Colo .; Eugene, Ore and Ogden, Utah. These are markets or regions where travelers typically have to make trips to major city centers like Denver or Salt Lake City.
Levy sees huge potential that exploits the negative aspects of larger airports.
“It takes a long time to get there, you have long lines and there are a lot of headaches and discomfort,” he said. “Small airports are honestly 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 run properly. In the late 1990s, he helped Allegiant Airlines launch services from small airports such as Rockford, Illinois, located approximately one hour northwest of Chicago’s O’Hare Airport. After several years helping Allegiant grow its operations, Levy moved to United Airlines. There, he rose to the ranks and finally became chief financial officer before leaving in 2018.
Susan Donofrio, aviation consultant at FTI Consulting, believes Avelo can replicate Allegiant’s success.
“While legacy airlines focus on leisure growth outside of their centers, this has left many opportunities on the table for airlines like Avelo to grow smoothly in underserved markets,” Donofrio said.
For now, Levy is focusing on a clean, hassle-free launch that often hinders start-ups. Avelo is taking off with a fleet of three Boeing 737s and plans to add three more this summer. Levy noted that he bought
And with the adaptation of a CEO focused on low costs, Levy enjoys the fact that he bought two of the planes at a discount from others in the industry looking to unload 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, so they represented, between the two planes, the range of a $ 15 million discount,” he said. dir Levy.