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New airline Avelo thinks it is the right time to begin flying as journey picks up 

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 right time to launch a brand new airline.

Levy is the CEO of Avelo, a low-cost provider based mostly in Burbank, Calif., that can 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 informed CNBC as he sat in Avelo’s places of work. “We stand in a fantastic place to get began right here and particularly being up and operating for the Summer time peak season, which must be good.”

Levy initially wished to launch Avelo a yr in the past, however the pandemic rapidly put an finish to these plans. So Levy and his group spent the final yr ensuring Avelo can be prepared when air journey confirmed indicators of coming again. In accordance 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 must route journeys by way of massive 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 may have lengthy strains and there are a number of complications and hassles,” he mentioned. “Small airports, fairly actually, 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 Nineteen Nineties, he helped Allegiant Airways launch service out of small airports like Rockford, Ailing., 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 way of the ranks and finally turned CFO earlier than leaving in 2018. 

Susan Donofrio, aviation marketing consultant 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 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 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 actual fact he purchased two of the airplanes at a reduction from others within the trade seeking to unload plane to avoid wasting hundreds of thousands of {dollars}.

“The 2 we bought had 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,” mentioned Levy.

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