Thursday, April 15, 2021
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New airline Avelo thinks it is the right time to begin flying as journey picks up

Avelo airplane.

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 right 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 mild on the finish of the tunnel and it’s coming quickly,” Levy informed CNBC as he sat in Avelo’s workplaces. “We stand in an important place to get began right here and particularly being up and working for the Summer time 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 staff spent the final 12 months ensuring Avelo can be prepared when air journey confirmed indicators of coming again. In keeping with 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 sometimes should route journeys via huge metropolis hubs like Denver or Salt Lake Metropolis.

Levy sees large potential exploiting the negatives that go along 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 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 Nineties, he helped Allegiant Airways launch service out of small airports like Rockford, In poor health., 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 via 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 centered on leisure progress 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 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 season. Levy famous he purchased

And becoming of a CEO centered on low prices, Levy is having fun with the actual fact he purchased two of the airplanes at a reduction from others within the trade trying to unload plane to save lots of thousands and thousands of {dollars}.

“The 2 we bought have been most likely 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,” stated Levy.

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