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New Airlines Preparing to Take Off

With commercial airline passenger counts still more than 40 percent below 2019 levels, would you be surprised to read that some people believe it’s the perfect time to start a new airline?  How about 90 new airline carriers?

According to the Wall Street Journal, more than 90 new air carriers will commence operations before the end of 2021.  The start-ups will take flight in North America, South America, Africa and Asia even though the global pandemic is still negatively impacting air travel.

With the tradition of “buy low—sell high” on their minds, these ambitious entrepreneurs believe the time is just right to launch a new airline.  And, according to aircraft leasing firm Avolon Holdings, funding is available to help with their plans to add more Boeing and Airbus aircraft to the skies. 

The entrepreneurs cite a number of opportunities, including “picking the bones of airlines gone West” because of COVID-19; jump-starting business plans that were shelved at the outset of the pandemic;  relying on bargain prices for aircraft or leasing options; and snapping up coveted landing slots not being utilized at desirable airports.  They also hope to first in line to hire the pilots, mechanics and flight crew members who were furloughed. 

One of the newcomers is Avelo Airlines, which began operations in April at Hollywood Burbank Airport in California.  The budget carrier plans to serve 11 markets in the Western U.S. with fares starting as low as $19.  Founder and CEO Andrew Levy said, “We stand in a great place to get started here, and especially being up and running for the summer peak season, which should be good.”

While conventional wisdom suggests that starting an airline is difficult even in the best of times, some industry experts actually complain that “starting” an airline has been easy— in fact, too easy.  The real challenge they say is maintaining momentum after the initial financing dries up and the loss-leader low fares and perks are a drain on revenue.

Consumers hope that these new start-ups will force already-established carriers to compete, resulting in lower ticket prices.