Low-Cost Airline Startup Sees Promise in Smaller Airports

Last week brought news of another new U.S. airline startup, the brainchild of Andrew Levy, United’s former chief financial officer who before that co-founded and ran Allegiant. This follows David Neeleman’s return to the U.S., with a startup targeting secondary airports with newly ordered Airbus A220s. Levy’s new airline, too, will be an ultra-low-cost carrier. Last summer, he purchased a small charter airline called XTRA Airways, which already has an FAA operating license and a team of operations and safety executives in place. That means the new business model can be ready to launch as early as the fourth quarter of this year, according to an investor solicitation document seen by Skift Airline Weekly. What exactly is the new business model? It will indeed be ultra-low-cost, a term that’s come to imply densely configured airplanes, quick aircraft turn times, intense aircraft, and airport gate utilization, high labor productivity, heavy outsourcing, few onboard amenities, low base fares, and heavy reliance on ancillary revenues. Levy’s new airline, more distinctly, will target all categories of travelers, which implies not just leisure and family-visit travelers but also those journeying for business. It cites successful low-cost carriers in Europe that have targeted multiple customer segments, an apparent reference to Ryanair and easyJet, both of which carry a lot of short-haul business fliers. The new airline will be “utilitarian but reliable,” arguing that incumbent ultra-low-cost carriers in the U.S. have “a poor reputation for customer service and reliability. This leads them to compete largely against each other for a relatively modest segment of the market characterized by highly price-sensitive leisure and discretionary travelers who have no other affordable air travel options.” They lack, furthermore, the appropriate products, service, and flight