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Two New Low-Cost Carriers Are Taking Flight in the U.S.

By Barbara Peterson

Apr 29, 2021

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Avelo’s first flight took off on April 28.

Courtesy of Avelo Airlines

Avelo’s first flight took off on April 28.

Avelo has started flying western U.S. routes with fares as low as $19 each way, and the founder of JetBlue is gearing to launch a new low-cost airline called Breeze.

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Two new discount airlines are taking off in the U.S. in time for the summer travel season.

First out of the gate is Avelo Airlines, a West Coast carrier that launched this week with a daily round-trip flight to Santa Rosa, in Sonoma County, from its home base in Burbank, California, at rock-bottom fares starting at $19 one way.

Ten other destinations are to be rolled out over the next three weeks, including Bozeman, Montana; Eureka and Redding in Northern California; Grand Junction, Colorado; Bend and Eugene in Oregon; and Pasco in Washington State’s wine region. Most will have service three or four days a week rather than daily in line with demand.

The focus for Avelo is on mid-size and smaller airports rather than the behemoth hubs dominated by the major airlines: Burbank instead of Los Angeles International Airport; Mesa Airport, just outside Phoenix, instead of Phoenix Sky Harbor International; and Ogden-Hinckley Airport in Utah as opposed to nearby Salt Lake City International Airport, as a few examples.

As an ultra-low-cost carrier, Avelo is also light on the frills. Flights will take place on single-class Boeing 737-800 aircraft, with 189 seats configured in a typically tight coach layout—although 60 of them will offer from two to nine inches of extra legroom for added fees starting at $18.

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Inflight service consists of free bottled water and a light snack; other snacks and beverages will be offered for sale. Wi-Fi won’t be offered at first but will be phased in next year, according to a spokesperson for Avelo.

If all this has a familiar ring, it’s because Avelo’s founder, Andrew Levy, is a former president of Las Vegas–based Allegiant Airlines, which pioneered the strategy of flying routes that have been overlooked by major carriers at prices well below the big-name competition.

And he’s not the only airline veteran seeking to capitalize on what’s expected to be a surge in pent-up demand for travel this year. JetBlue founder and serial airline entrepreneur David Neeleman (he was also involved in Canada’s WestJet and Brazil’s Azul) is expected to kick off his latest venture, Breeze Airways, imminently. The idea is to fly shorter domestic routes on smaller jets than Avelo’s 737s. Neeleman hasn’t yet revealed where Breeze will fly or what it will charge, but, like Levy, he has pledged to undercut the going rate offered by mainstream airlines with one-way fares of “well under $100,” Neeleman said during a recent interview.  

In the case of Avelo, that introductory $19 fare will still be offered at least through the end of June on select dates and flights but the airline says it will strive to keep both fares and fees affordable and transparent. One-way fares will likely stay in the $30 to $50 range, according to a spokesperson.

It costs just $10 to check a bag, but $35 to bring an overhead carry-on aboard the plane, which should help cut down on battles for bin space. Priority boarding costs $10 and reserving a window or aisle seat starts at $5. As mentioned above, roomier rows cost at least $18 to reserve. The steepest charge is $95, for bringing a pet into the cabin. And while fares are nonrefundable, there will be no change fees for fliers who need to alter their plans (they will simply get a future flight credit).

The timing of these ventures might strike some observers as odd, given the drastic falloff of air travel and the generally tough chances for a newcomer even in nonpandemic times—there hasn’t been a new mainline airline in the U.S. in 14 years, when Virgin America joined the market.

Yet these two airlines insist they’re in a better position than they would have been prior to the pandemic—both actually announced their plans back in 2018, and would have launched sooner if the COVID-19 crisis hadn’t hit. As Levy has pointed out, not only is it cheaper to acquire aircraft in a downturn but most airlines cut back service so drastically that there are more routes available now with little or no competition for them. 

Said Levy, “After more than 20 years of shrinking consumer choice, the American flying public wants and deserves more options and lower fares.”

>> Next: Data Shows a Summer Travel Surge Is Coming. Will Airfares Surge, Too?

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