Launching an airline in the middle of a pandemic?

It might sound crazy, but when Andrew Levy was preparing to get Avelo Airlines off the ground a year ago he didn’t see challenges — he saw opportunity. So far, his hunch has paid off.

“Right now we have about 30 daily departures and by mid-summer it’ll be close to 45,” said Levy, the airline’s founder, chairman and CEO. “By the end of the year we should be close to 100 departures a day.”

Avelo operates one hub at Hollywood Burbank Airport and another at Tweed New Haven Airport in Connecticut. The company services 10 destinations from Burbank, including Denver, Salt Lake City, Eugene, Oregon and Boise, Idaho.

“The pandemic has had a big impact on the industry,” he said. “That caused revenue declines and prompted many of the big carriers to pull back and focus on their main hubs. But it also left openings at smaller, secondary airports in cities like Burbank and New Haven — and lots of opportunities for discount service.”

An expanding footprint

The airline more than doubled its nationwide destinations to 27 from 12 during its first year and it continues to offer discounted one-way fares starting as low as $59 on several popular routes.

The carrier, with a staff of about 400 employees, celebrated its one-year anniversary April 28, and it already expanded its fleet of Boeing 737s to eight from three. The company expects to boost that to 15 by year’s end.

“We have commitments that would take us to that,” Levy said, adding that Avelo completed more than 5,300 flights over the past year, connecting an estimated 600,000 travelers to their destinations.

Levy is no stranger to the industry. He was a co-founder and president of Allegiant Air and served as chief financial officer at United Airlines. He is also a board member of Copa Airlines, a Panama-based carrier.

“I believe there is room for more low-cost low airfare seats in the U.S.,” he said. “A lot of consolidation occurred in the industry after 9-11. That was good for airlines because it reduced competition and allowed them to raise prices. But it was bad for consumers.”

Birth of an airline

Avelo rose from the ashes of another air carrier that was struggling to remain in operation.

“I bought this airline that was small and had been stripped down to a bare minimum of about 10 individuals and one airplane,” Levy said. “The biggest issue I had was raising the capital to execute my business plan. That takes an enormous amount of money.”

With the help of investors, he managed to raise enough money by the end of 2019, just before the COVID-19 pandemic arrived. The global health crisis has impacted businesses across the board, but Levy said the airline industry has already regained a lot of momentum.

“The TSA numbers will tell you that we’re awfully close to where we were pre-pandemic,” he said. “When you factor in international travel it’s still spotty, but domestic traffic is just about fully back. Look what the hotels are charging. People want to fly.”

Data from the Bureau of Transporation Statistics (not seasonally unadjusted) show U.S. airlines carried 674 million passengers in 2021. That was 85% more than the 369 million passengers moved in 2020 but 27.3% below the 2019 count of 927 million travelers.

More recent figures show 496,531 U.S. flights operated in February 2022, or 87.9% of the 564,614 flights operated in February 2019.

The International Air Transport Association expects overall traveler numbers to reach 4 billion in 2024 (counting connecting trips as one passenger). That equates to 103% of the pre-COVID 2019 total.

Despite the expected uptick, the number of commercial carriers in the U.S. has been steadily decreasing, according to Statistica. In 2008 there were 22, but by 2021 that had fallen to 18. The decline among smaller airlines has been more dramatic, falling from 66 in 2008 to 43 by 2021.

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