Avelo airplane.Supply: AveloWith demand for air journey rising shortly because the U.S. reopens from the Covid-19 pandemic, Andrew Levy thinks it i
Avelo airplane.
Supply: Avelo
With demand for air journey rising shortly because the U.S. reopens from the Covid-19 pandemic, Andrew Levy thinks it is the right time to launch a brand new airline.
Levy is the CEO of Avelo, a low-cost service 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 gentle on the finish of the tunnel and it’s coming quickly,” Levy instructed CNBC as he sat in Avelo’s workplaces. “We stand in an amazing place to get began right here and particularly being up and working for the Summer season peak season, which needs to 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 journey confirmed indicators of coming again. In response to Worldwide Air Journey Affiliation, the pandemic has value 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 must route journeys by means of large 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 could have lengthy strains and there are a number of complications and hassles,” he mentioned. “Small airports, fairly truthfully, are simply merely a greater expertise and I believe 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 1990s, 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 in the end grew to become CFO earlier than leaving in 2018.
Susan Donofrio, aviation guide FTI Consulting, thinks Avelo can replicate Allegiant’s success.
“Whereas the legacy airways are targeted on leisure progress out of their hubs, this has left a number of alternative on the desk for airways like Avelo to develop unchallenged in underserved markets,” Donofrio mentioned.
For now, Levy’s focus is on a clear launch with no hiccups that always hinder start-up corporations. Avelo takes off with a fleet of three Boeing 737s and plans so as 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 very fact he purchased two of the airplanes at a reduction from others within the business trying to unload plane to avoid wasting hundreds of thousands of {dollars}.
“The 2 we bought had been in all probability a few third decrease (in worth) 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,” mentioned Levy.