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New airline Avelo thinks it is the right time to begin 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 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 advised CNBC as he sat in Avelo’s places of work. “We stand in an ideal place to get began right here and particularly being up and operating for the Summer time peak season, which must be good.”

Levy initially needed to launch Avelo a yr in the past, however the pandemic rapidly put an finish to these plans. So Levy and his staff spent the final yr ensuring Avelo could be prepared when air journey confirmed indicators of coming again. In accordance with 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 huge potential exploiting the negatives that go along with bigger airports.

“It takes a very long time to get there, you will have lengthy strains and there are a variety 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 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 centered on leisure development out of their hubs, this has left a variety 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 firms. 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 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 in all probability a couple of third decrease (in value) 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,” mentioned Levy.