Two New Start-Up Budget Airlines Currently in the Works

Can the U.S. airline industry handle another budget carrier to compete with the likes of Spirit and Allegiant?

Can it handle two?

That soon could be the case as two start-up airlines are in the works, led by two respected names—XTRA Airways, founded by former United Airlines chief financial officer Andrew Levy; and Moxy, led by JetBlue founder and CEO David Neeleman.

XTRA could be flying as soon as later this year, Levy told Boston-based radio station WBUR.

“There’s a lot of room for more airplane seats in the United States,” said Levy, who has experience with low-cost carriers as the co-founder and president of Allegiant Air before he moved over to United.

“Doing the same thing as everyone else, but trying to do it better, hasn’t worked, historically, very well in the airline industry. So that’s certainly not what we’re trying to do, is out-Spirit Spirit or out-Allegiant Allegiant or anybody else like that. We aim to do something that’s different.”

He declined to elaborate on what would separate XTRA from its budget competitors. But he did admit that utilizing smaller airports helps keep costs down. For instance, Allegiant flies out of the big New York City airports but also offers flights to and from Stewart International Airport in Newburgh, N.Y., 60 miles north of the city.

“We went after a market that was just different and was not being served, and created a business that is far bigger than I think many people thought it could ever be,” Levy said of Allegiant.

XTRA hopes to have five planes to launch service by later this year, and 45 by the year 2023.

Neeleman plans to do the same with Moxy when it comes to using smaller, regional airports. Moxy has 60 Airbus A220 jets on order.

“There is a line around the block of people wanting to talk to us, wanting to get service,” Neeleman told Conde Nast Traveler. “Finding the airports is not the problem.”

Neeleman said he wouldn’t be involved with Moxy if he didn’t think it would separate itself among budget carriers.

“I don’t start airlines for the sake of starting airlines. I do it because I see that there’s an opportunity,” he said.

“Today, we are getting back to the point where there is a lot of concentration in the industry and the legacies aren’t doing a lot of flying that people really want. So we are going to try to fill that gap. If there is an opportunity, then I can build a better mousetrap and do something that others aren’t doing and can’t do.”

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