In a tough time for start-up airlines, Avelo, one of last year’s crop believes it will be profitable by the end of this year and says it has the numbers to show why. Another, Aha! Airlines, bit the dust in bankruptcy last month.
Avelo’s CEO, Andrew Levy, who’s held top executive posts at United and Allegiant, says that the airline’s tight focus on cost structure and very low fares has enabled it to keep its planes filled, making money even when fuel prices were at their highest over the summer.
Overall, Avelo has filled 70% of its seats, and more than 80% over the summer while adding new routes and a few not-so-new planes. Levy doesn’t believe in new airlines buying new planes; he believes that the lower cost of used 737s more than makes up for any efficiency gains or lower maintenance. Avelo has 11 used 737s and expects to have 16 by early next year.
So far, Avelo is operating almost as two separate airlines, with a West Coast network operating out of Burbank Airport in Los Angeles, and an East Coat network with hubs at New Haven, Connecticut and Orlando, Florida. Its newest routes, just announced, will link Binghamton, New York with Orlando and Fort Myers, Florida
The airline has shifted and canceled various routes as the months have gone on; Levy told reporters for ThePointsGuy website that “When you’re starting and you don’t have a massive balance sheet, then you really have to have very little tolerance for markets that don’t work. Because you just can’t afford to take the risk. You can’t afford to fly airplanes and not make and not generate enough revenue to be able to cover your costs.”
