It’s not often a new airline with adequate funding and a real business plan launches in the US, but today is one of those days. The long-awaited Avelo Airlines, founded by former Allegiant President Andrew Levy, is officially a thing as of today. Tickets go on sale this morning at 10 8am PT and the first flight on the all-737-800 airline will take off from its Burbank base to Santa Rosa on April 28. So what exactly is Avelo’s plan? I spoke with Andrew himself to learn all about it.
This airline has been a long time coming. Andrew started working on it back in 2014 after he left Allegiant. He took a break with his unexpected move to become CFO at United, but when that ended nearly three years ago, he put his efforts back into what is now Avelo.
So what is Avelo’s story? This quote from our conversation really summed it up nicely for me.
We’re not curing cancer. This is about getting people from point a to point b safely, reliably, and inexpensively.
Avelo will be a short-haul operator which, to Andrew, means an average stage length of about 600 miles or 2 hours, and it will build a product to cater to that. There are some unique touches, but Avelo isn’t trying to reinvent the low-cost model. It is just trying to evolve and improve upon it. That, however, doesn’t make for a profitable airline. You need a unique niche. Before we get into that, let’s start with the basics.
How The Heck Do You Say That?
I know when I first saw the name, I was entirely unclear on how exactly to pronounce it. I’m happy to report that I have the answer, straight from the horse’s mouth (along with me repeating it).
It is uh-VEH-low. Or, to help you remember, think of it as not two velos but rather just one. A velo.
I asked if there was special meaning behind the name, but there’s not. They just had to come up with a name that wasn’t traditional — he wanted no geographies — and was trademarkable. They liked this one and now they’re backing into a cooler origin story. Andrew’s favorite so far is that ave means “bird” and velo means “swift,” so it’s a swift bird.
Now that we have that out of the way, let’s move on to the really important stuff.
“We Think the Airports Matter”
Andrew explained to me that the airports they choose make the biggest difference in the experience. Multiple times in the press release, I saw the rather silly-sounding “smooth and convenient” mentioned as being a unique service point. While Andrew did say that they are working on ways to cut down on all the little points of friction — like having so-called “linebusters” working any queue to help expedite people with smartphones — he admitted that “the airport is the single most important part of that.”
For its first base, Avelo chose Burbank. Andrew is very excited about this, and he thinks there’s nothing quite like Burbank that is so convenient to such a huge population where the airline could walk right in. He suggested Love Field as a similar type of airport, but he also added that there is no room there.
Burbank wasn’t supposed to be at the top of the list. Andrew figured it would be a spoke from another base, but when the pandemic cutbacks began, Avelo saw opportunity to get into Burbank and went for it. The first three airplanes will be based at the airport, and the initial schedule will have flights to 11 cities.
I see these as falling into different buckets. For example, Phoenix is actually Phoenix/Mesa (AZA). That along with Ogden — the former with 1x daily and the latter with 6x weekly service — act as an alternate airport for the nearest big city. Considering Avelo wants to have bases in secondary airports, these might fit the bill in the future.
Then there are the bigger leisure destinations like Bozeman or Santa Rosa. These have service from Los Angeles today, but they don’t have anything from Burbank. People who were going to fly from LAX might reconsider, and more will think about a trip with these low fares.
Lastly you have ones like Eureka and Redding which are used to getting tiny regional jets with expensive fares from legacy airlines and not much else. With 3x to 4x weekly, these markets could open up, but it is something of a stretch.
Andrew explained that they only want to fly into markets with no direct competition which is easy when you’re going from Burbank. But if you start comparing to LAX, there is a lot of overlap including many routes with his former employer, Allegiant.
A Different Kind of Allegiant?
Considering Andrew’s background, it’s hard not to compare this to Allegiant right off the bat. The low frequency, low fixed cost model is definitely a page out of Allegiant’s book, but there are some differences.
The airports they choose will not overlap. I think of Allegiant choosing a place like Las Vegas or LAX, a huge primary airport, while Avelo will choose a secondary airport. But Allegiant also has big bases in St Petersburg, Orlando/Sanford, and Phoenix/Mesa, so wouldn’t that overlap? These Burbank routes don’t seem all that far from something Allegiant would do.
Avelo, for its part, doesn’t seem interested in competing with Allegiant head-to-head. It sees plenty of opportunity in this secondary city model while Allegiant has moved much of its growth to mid-size cities like Austin, Pittsburgh, and Des Moines. Those aren’t places where we’re likely to see Avelo. The question, will this shift Allegiant’s plans?
Avelo is also going to spend a lot more time and effort on solid operational performance. This is a key difference versus the Allegiant model that existed when Andrew was there and the MD-80s were flying around. But today, Allegiant doesn’t have those same issues so it’s not likely to be a real differentiator.
Minor Points of Difference
What else is different about Avelo? Probably what stood out to me most is the checked bag fee. It is only $10 for the first checked bag, but if you want to carry on anything more than a personal item that fits under the seat, you have to pay $35. That’s a huge spread, and it seems to leave money on the table, so I asked Andrew to explain the strategy.
We really want people to check their bags…. We want to clear out the cabin, make the boarding and deplaning process really smooth and quick. The second part is we want to offer great value to our customers; checked bags have become extremely expensive.
There’s that “smooth” word again. It does give you some sense of how the airline is viewing its offering.
It will have a base experience with 29 inch seat pitch in slimline seats, so a fairly standard ULCC option. Advanced seat assignments will cost extra. There will also be upwards of a third of the seats on the airplane, however, with greater pitch ranging from 31 to 38 inches. That will simply cost more to book at the time you choose a seat, similar to what Frontier does.
For now, each passenger will be given a little bag with a sanitizer wipe, a bottle of water, and a snack. Andrew says the free bottle of water will stay, but the rest may or may not continue beyond the pandemic. It won’t be available at launch, but the plan is to have sodas/coffee/liquor and shelf-stable snacks available for purchase onboard.
Another differentiator is hoped to be a short term one. There is no wifi. I had assumed this was because of the short stage length, but no. Andrew says that Avelo just wants to wait to leapfrog the existing generation. It sounds like Avelo is hoping for wifi next year sometime, but there aren’t any details to be shared on that.
“The Race Goes to the Tortoise”
Possibly the biggest difference — especially in comparison to fellow start-up Breeze which is expected to announce a much more aggressive launch plan soon — is the pace. Avelo is in no hurry to grow quickly. It wants to do things right before it starts expanding faster.
Right now, Avelo has three 189-seat 737-800s and will have another three delivered this quarter. That’s all it has committed to so far, but it can get more when it wants, undoubtedly. Though the plan isn’t final, he says that a second base could be announced this quarter for service beginning as early as summer. They’re still working on that.
For now, the airline will focus on getting a solid, reliable operation off the ground. Tickets are available starting this morning at aveloair.com, and they will also be found on Google Flights. They won’t, however, be sold through any third party agencies. If you’re in the target audience, you’ll probably see ads popping up online as they try to generate awareness in markets that haven’t had nonstop service before.
Here are the full market rollout details:
This will not be an easy start-up for the airline. If it makes a market work, then will others move in? It’s hard to say, and we really don’t know what’s next after Burbank so we can’t really say there’s a “type” of market that Avelo is targeting.. Avelo is different enough from many airlines to likely not cause them to even blink, but there are some that will be watching with great interest.