Avelo launches first East Coast flights today; budget carrier’s founder tells TPG why they’ll succeed

Nov 3, 2021

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.

Startup budget carrier Avelo Airlines will launch its East Coast operations on Wednesday, marking a new phase in the airline’s planned expansion.

The low-cost carrier will operate a ceremonial first flight from its new base at Tweed New Haven Airport (HVN) in Connecticut to Orlando, before settling into a schedule of five weekly flights between the cities.

Avelo will launch service to three other cities in Florida — Fort Lauderdale (FLL), Fort Myers (RSW) and Tampa (TPA) — later this month, all using a fleet of Boeing 737-700 aircraft.

Want more airline-specific news? Sign up for TPG’s free new biweekly Aviation newsletter!

Avelo launched in April with service primarily from Burbank, California (BUR), to cities across the West Coast and Rocky Mountain region.

Despite having bases and serving routes on both coasts, the airline doesn’t plan to connect the East Coast network to the West Coast one, founder and CEO Andrew Levy told TPG during an interview.

“They really are two standalone little airlines,” Levy said. “I mean, that’s how I think of them.”

“Obviously it’s one airline, but they’re really two standalone bases and never the two shall meet, or at least not now.”

Instead, Levy, who was previously the president at Allegiant Air and CFO at United, imagines both operations managing on their own.

Read more: Fanfare galore: What it was like flying on Avelo Airlines’ inaugural flight

“The West Coast needs to back itself up, and New Haven needs to back itself up.”

Part of the reason for the separation is pure distance; Avelo exists to fly short-haul, Levy said, and connecting the two networks would involve flights that are too long to fit within the business model.

“Florida’s not even really my definition of ‘short-haul,’ but you can’t not fly to Florida,” Levy said. “We’re trying to stay short, turn the airplane often, get lots of cycles on the airplane, carry lots of people each and every day, have fast turnarounds — that’s a way to keep the costs down.”

That, and avoiding larger hubs in favor of smaller airports with lower costs, follows the playbook first written by Southwest.

The low-cost pioneer: Behind the scenes: Inside Southwest’s 50th-anniversary celebration

“The old traditional LCC model, right, that Southwest kind of popularized 50 years ago,” he said. “Turn the airplanes fast, put a lot of turns on them, fly short, and you get the best yields per flight.

Since the late 2000s, New Haven has had regular service on just one airline — American, which assumed partner US Airways’ service there to its hub in Philadelphia. But American pulled out of New Haven altogether at the end of September, part of broader pandemic-era changes to that carrier’s network.

American’s departure left the airport without any airline service during October, a monthlong drought that will come to an end with Avelo’s debut there Wednesday.

It’s that backdrop that Levy says presents the perfect canvas for Avelo to make hay on East Coast with its low-cost formula. He thinks there’s space — and demand — to support a rapid expansion.

“In 2022, I would expect that we’re going to carry maybe half a million customers out of [New Haven],” Levy said. “Maybe not quite that high, but it’ll be awfully close to that number. And then it goes from there.”

Levy believes that southern Connecticut is an underserved market, ripe for opportunity with leisure and personal travel-focused routes.

“You live in southern Connecticut, you really have some lousy options,” Levy said, citing long drive times to New York-area airports or Bradley International Airport in Hartford. “So we have the ability to go in there and offer not just a great fare, but incredible convenience.”

Budget carrier battle: America’s 2 newest airlines, Avelo and Breeze

The airline, like most budget carriers, relies on low fixed and capital expenses to keep profitable. For Avelo, that’s meant acquiring planes second-hand and maybe not doing too much to customize them. Some of the 737-700 planes acquired from Southwest still have the old owner’s interiors — and will for the time being.

“If you don’t know [to look for] Southwest, you wouldn’t walk on and say, ‘Oh wow, this is Southwest.’ I mean, there’s no Southwest signage or anything,” Levy said.

Eventually, Levy said, he expects to standardize the interior among all of Avelo’s aircraft, but that won’t happen for a while.

“When you’re early stage like we are, capital is really precious and investing in new seats or things of that nature is really difficult to get comfortable with,” he said. “So it wasn’t a priority for us. It still isn’t.”

“But our intention over time is absolutely to have a standard interior, a standard seat.”

The question is whether that matters at all to Avelo’s new passengers.

“I don’t think customers care as long as it’s cheap, it’s comfortable and we offer great convenience,” Levy said.

Reliability is also important, and Levy said that the airline would start service with slack built into the system to avoid meltdowns like those experienced by Southwest and American in recent weeks.

Service consistency is another key point. Avelo has already cut several routes from its West Coast network shortly after announcing them, in some cases before service even started. Levy said that has nothing to do with the airline’s capability, but rather with demand, which was partly impacted by the delta variant surge in the U.S.

“We had three markets that, unfortunately, when we announced, it seemed like the market just wasn’t ready for our service. It wasn’t the right time, there wasn’t enough interest, whatever it may be,” Levy said. “I think the routes we announced and didn’t serve are all routes that I expect we will probably try again at an appropriate time in the future.”

“At the end of the day, this is a business that needs to earn a return for it to grow and prosper, and to deliver value to all of our stakeholders,” he added. “A big part of that is making sure that you’re flying where you need to fly, when you need to fly, and how often.”

TPG will be on board the first flight from New Haven, so be sure to check back for additional coverage from the launch.

Featured photo by Joe Scarnici/Getty Images for Avelo Air.

Delta SkyMiles® Platinum American Express Card

Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

Apply Now
More Things to Know
  • Limited Time Offer: Earn 90,000 bonus miles after you spend $3,000 in purchases on your new Card in your first 3 months. Offer ends 8/3/2022.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs up to two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide including takeout and delivery in the U.S., and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. Payment of the government imposed taxes and fees of no more than $80 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA PreCheck® after you apply through any Authorized Enrollment Provider. If approved for Global Entry, at no additional charge, you will receive access to TSA PreCheck.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
17.24%-26.24% Variable
Annual Fee
Balance Transfer Fee
Recommended Credit
Terms and restrictions apply. See rates & fees.

Editorial Disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airlines or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.