Exactly one year after its launch, Avelo Airlines has embarked on major expansion, disclosing plans to establish a base at Orlando, add Wilmington (North Carolina) its network and launch several new routes.
The Houston-based airline’s chief executive is also planning more expansion as 2022 progresses.
Orlando International airport will become the company’s third crew base, joining two others, Avelo says on 28 April. The others include Avelo’s original base at Hollywood Burbank airport in California and its base at New Haven Tweed airport in Connecticut, opened in November 2021.
The carrier will base two 142-passenger Boeing 737-700s at Orlando, with plans to station more jets there in the third and fourth quarter of this year, it says.
Also this year, Avelo will move all its pilot and flight attendant training programmes to Orlando, with training to be conducted by Avenger Flight Group. Currently, Avelo’s flight attendants train in South Florida, and pilots train in Dallas, says the airline.
Avelo plans to start three new routes from Orlando this year as part of the expansion.
On 30 June it will begin three-times-weekly flights between Orlando and Charleston in South Carolina, using 737-700s.
Avelo disclosed its plan to operate that route several days ago. Immediately after, competitor Breeze Airways fired back, saying it too will fly the Orlando-Charleston route. Breeze advertised $39 one-way fares, undercutting Avelo by $20. Avelo has since matched.
Orlando-Charleston will be the first route on which Avelo and Breeze will compete head to head. Both carriers launched operations in 2021 amid the pandemic, and both largely target secondary routes. Breeze will operate the Orlando-Charleston route using smaller aircraft – Embraer 195s and Airbus A220s – but with daily frequency. Silver Airways, which operates ATR turboprops, is currently the only airline flying the Orlando-Charleston route, though with limited frequency.
Avelo chief executive Andrew Levy believes his carrier’s larger mainline 737s, with lower seat-mile costs, provide a competitive advantage.
Also on 30 June, Avelo will begin five-times weekly seasonal flights from Orlando to Baltimore – an incredibly competitive route already served by Spirit Airlines, Frontier Airlines and Southwest Airlines.
Levy concedes Orlando-Baltimore is an outlier for his carrier, which has otherwise tended to operate routes with limited competition. But he sees opportunity, noting Orlando’s air capacity is down from 2019 levels, while demand and fares are up. “We’re kind of skimming traffic on that route for three months,” he says.
Avelo expects to operate at least 10 routes from Orlando by the end of 2022. “It has actually a lot of places that don’t have [direct] service,” Levy says. “There’s a number of other markets in Florida that we view as potential bases.”
The airline also rolled out new routes from Wilmington, a city new to its network. Avelo will start three-times-weekly flights between Wilmington and New Haven on 30 June. Then, on 1 July, it will start three-times-weekly flights between Wilmington and Orlando, and seasonal three-times-weekly flights from Wilmington to Baltimore, the airline says.
The Wilmington routes are exclusive to Avelo.
LOOKING FORWARD, AND BACK
As Avelo marks its first anniversary – the airline launched flights on 28 April 2021 – CEO Levy reflects on “a crazy year”.
Two waves of Covid-19 “sent our bookings south just as we were gaining momentum”, he tells FlightGlobal. Other headwinds included supply chain issues, delays in aircraft deliveries and massive increases in the price of fuel, which he views as the carrier’s greatest headwind by far.
But launching during the pandemic allowed Avelo to take advantage of a surplus of experienced pilots, cabin crew and airport personnel. “Now, it’s exactly the opposite,” says Levy, a verteran of United Airlines and Allegiant Air. To remain competitive during an acute labour shortage, Avelo has twice hiked its pilot pay by “a material amount”, and has given raises to other frontline workers, he adds.
The carrier claims it is not struggling to recruit new workers, saying employees are attracted to its small, entrepreneurial operation and out-and-back flying, which allows crew members to “sleep in their own beds,” says the carrier.
Avelo says it already has 160 pilots and flight attendants, and it anticipates hiring hundreds in the years to come. The company’s total employee count is more than 400.
Levy notes the financial impact of increased pay scales are mitigated somewhat by the start-up’s lack of high-seniority personnel.
Despite talk of shortages of narrowbody aircraft, Levy claims Avelo is able to lease all the second-hand jets it wants, and at “phenomenal prices”.
Avelo, which began with three 737-800s on the US West Coast, has added five 737-700s on the East Coast, for a total eight 737NGs, according to Cirium fleet data. Levy anticipates his airline will have 15 jets by the end of 2022.
Avelo’s New Haven base, opened last November, has been growing at a fast clip, with the airline anticipating flying to 14 destinations from the city by year-end. The overall network has more than doubled, from 12 destinations at launch, to 27.
While several large US carriers have experienced significant operational troubles in the last year, Levy says Avelo has been “running a really good, on-time airline”. He pegs on-time performance at 82% from day one and says load factors are now consistently greater than 80%.
Levy foresees additional growth, saying the carrier may establish one or more additional bases before year-end.
The chief executive seems unbowed by possible further consolidation among US low-cost airlines, which he views as making Avelo’s lower fares and cost structure even more valuable.
As Avelo enters its second year, the airline will focus on becoming cash break even, then on turning a profit. Despite industry pressure, Levy remains optimistic, saying, “I still believe we’ll be there by the end of this year.”