Most Americans travel in more than a year and will soon have two new travel airlines to use for those trips.
Both hope to attract passengers by filling in the smaller strands of the cobweb of air routes crossing the United States.
Avelo Airlines said Thursday it will begin flights later this month to 11 destinations from Burbank, California. The startup plans to add other routes to the West as soon as it replenishes its fleet of three Boeing 737s.
Avelo was founded by a longtime airline executive who believes there is room for another low-fare carrier in addition to the few low-cost airlines already on the market.
“There are too few low-cost locations in the United States. That’s why we think the opportunities are huge, ”said Andrew Levy, Chairman and CEO of Avelo. “Customers need a really inexpensive way to get from point A to point B.”
Breeze Airways awaits, the latest creation by David Neeleman, who helped launch Canada’s WestJet before founding JetBlue Airways JBLU.
and the Brazilian airline Azul.
Breeze plans to fly to “abandoned, forgotten” markets, including many that have been abandoned by the larger airlines. Breeze is currently performing test flights for the FAA and may announce route and fare details as early as next week and passengers in May.
Planning for both airlines began even before the coronavirus pandemic, but they start out just like long-term Americans are eager to break free and travel like it’s 2019 again. More than 1 million Americans have flown every day for nearly a month, and the people who saved their jobs during the pandemic saved more that they could use to travel.
The last new US airline was Virgin America, which started flights in 2007 and disappeared after Alaska Airlines ALK.
bought it in 2016.
Starting an airline is difficult due to the high costs of aircraft, fuel, technology and labor. The pandemic helped, however, as it led to an oversaturation of aircraft and the available workforce, says Jonathan Kletzel, a transportation expert at PwC. However, startups face another risk – fierce resistance if they threaten a market that is being priced by a well-known airline.
When new entrants appear in a city, “big companies can always deploy (flights) there at a low cost and crush them completely,” says Kletzel. “These participants need to make sure they are targeting areas that are not going to flap the wrong feathers.”
Levy – former employee of Allegiant Air and United Airlines UAL,
a CEO who finally made his long-standing dream of starting an airline come true.
Avelo’s strategy is straight out of a book on low cost carriers first written by Southwest Airlines LUV.
in the 1970s and copied by others, including Allegiant. Part of this strategy involves the use of secondary airports that have lower costs and less congestion – planes land, take new passengers and take off quickly, spending more time in the air and less time on the ground.
“It’s not that they haven’t done it before, it’s just that they haven’t done it for a very long time – to stay away from really big airports where possible,” says Levy.
One of Avelo’s early destinations, Ogden, Utah, “is a beautiful, comfortable and easy-to-navigate airport,” he says. “There are many people in the country who are not served, or at least are underserved. These are the markets we are targeting. “
Allegiant is the only airline currently flying to Ogden, and only from Phoenix, while about a dozen carriers are competing in nearby Salt Lake City.
Avelo’s first flight on April 28 will be from Burbank to Santa Rosa, the wine country of Northern California. No other airline operates this route, although Alaska Airlines departs for Santa Rosa from John Wayne Airport, about 90 minutes from Burbank.
The airline will operate a 189-seat Boeing BA,
737-800 aircraft, which are plentiful and, according to Levy, a good deal in the used aircraft market. There will be no internet access on board the aircraft, at least this year.
Avelo launched with promotional rates of $ 19. Like other low-cost airlines, Avelo will charge additional fees for many options, including dedicated space and carry-on luggage that can be stowed in overhead bins.
The cost of a new airline “is very easy to predict; income is the hardest part, ”says Levy. If Avelo reaches its revenue targets, “we will definitely be profitable by the end of this year and 2022 will be profitable.” This is roughly what analysts have for the major US airlines, which are known as commodities with an established customer base.
Breeze did not specify where it will start operations, although the airline has hinted it will be in the southeast, including Florida, a popular tourist destination. Neeleman says the time is right.
“Leisure traffic is crazy right now. Many people have vaccines, and younger and healthier people say, “I’m fine,” Neeleman said in an interview. “There is a lot of pent-up demand, probably more than the number of seats available.”
Unlike Avelo, Breeze will start using smaller aircraft, the 118-seat Embraer E-190, which it will lease, including some from Azul. Neeleman said lower operating costs for small planes will help his new airline succeed on routes that are being abandoned or abandoned by others.
“We can get travel costs 20-25% lower than other guys,” he said. “Because we have a smaller aircraft, we can enter markets that may not make sense to them, but make all the sense to us.”
According to Neeleman, there are “hundreds” of such ignored routes. According to him, about 80% of the airline’s capacity will be deployed on routes where there are no other non-stop flights, but only indirect connections.
Like Avelo, Breeze jets will not have a separate cabin for first or business class passengers, but Neeleman is not ruling that out when his airline launches slightly larger Airbus A220s later this year.
Neeleman estimates that Breeze will need to fill about 60% of its seats to break even.
“We are fully counting on profitability next year,” he said.