Avelo Airlines: New Player in the US Airline Industry

The US airline industry experienced losses in the last 12 months. But with millions vaccinated plus CDC’s updated guidance for fully vaccinated individuals, it seems that the worst is over. And with slight improvement comes possible opportunities. Avelo Airlines is one of the newest players looking for a piece of the US budget airline market.

Houston-based Avelo Airlines is a venture by former president of Allegiant Airlines Andrew Levy. He purchased XTRA Airways in 2018 and renamed it Avelo. This venture is expected to start in early April.

Andrew Levy is known in the aviation industry. Aside from serving as president of Allegiant Air, he also worked as the Chief Financial Officer of United Airlines.

Avelo Airlines has a fleet of Boeing 737-800s. It currently has three aircraft. Levy said that “planes have never been cheaper”. These aircraft were leased and funded after Avelo raised $125 million in capital. None of these aircraft are brand new. Each plane is around 13.5-15.4 years old. And this is one of the reasons why Levy was able to offer highly competitive rates.

Ultra-Low Cost Travel

Passengers can expect barebones service from Avelo Airlines. The plan is to fly city pairs using secondary airports. Levy’s strategy is to target markets that have been ignored by other airlines. One of the lessons learned by Andrew Levy from Allegiant Air is to offer something different. He said in Los Angeles Times, “the best way to compete is not to compete”.

The Avelo CEO said that the US has a large airline market. According to Levy, some don’t care about the brand and are happier to have a good deal. However, there is still no official list of destinations for Avelo. But one thing is sure, we can expect Avelo to start at Hollywood’s Burbank Airport.

Delayed by The Pandemic

If not for the pandemic, Avelo would’ve started last year. But come to think of it, it may have been good timing after all to start this year than last year. The airline industry lost billions from last year. Levy believes that now is the best time to start an airline.