The former chief financial officer of United Continental Holdings Inc. is betting that the U.S. airline industry needs another budget airline. Andrew Levy, who also helped establish Allegiant Travel Co., is raising money for a new low-cost niche carrier designed to serve secondary airports with a reliable experience that differs from current players in the market.

“We think the opportunity exists for a real high-quality, highly reliable, extremely low fare, basic transportation service,” Levy said Tuesday. The airline, which has not yet been named, will offer “a better product and experience but still offer really low prices,” he said.

The Houston-based company has not decided on an aircraft type but is leaning toward leasing Boeing Co.’s 737-800. Levy, 49, purchased XTRA Airways Inc., a Florida-based charter carrier, in August. XTRA’s parent last year sold most of its fleet to Swift Air but kept one Boeing 737-400 to retain its Part 121 commercial airline certification.

The airline is seeking to raise $100 million and expects to finish its fundraising by June. The carrier could start service with around five aircraft late this year or in early 2020, Levy said.

United Air’s Former CFO to Launch a New U.S. Budget Airline
https://www.bloomberg.com/news/articles ... et-airline

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Guess all the rumors were true following his departure from UA.

Good luck to the man. He certainly has deep knowledge, though the industry is a tough one as we know.

The US needs another budget airline?

Interesting, so based in Houston serving secondary markets. I like it!

KRIC777 wrote:

The US needs another budget airline?

Actually, yes...
There are plenty of airports and routes out there, and any competition for the US4 is welcomed. Competition inspires good customer services, something very lacking on US airlines these days.
The toughest part is getting around the loyalty plans.

I am very interested in the description of the niche, and how profits could be realized with really low fares and simple pricing. Those ancillary fees seem to be the key to ULCC profitability.
But Levy presumably knows what he is doing.

The words " high-quality " " extremely low fare " " basic transportation " don't mix too well in the airline industry.
It's either high quality or low fare and basic - he needs to decide which.

"the U.S. airline industry needs another budget airline" lol what

Please tell me this happens! I'd love to have a corporate job for an airline in my home city!!!

(Yes I looked at UA but theyre mostly IT and accounting jobs in Houston)

FlyingElvii wrote:

KRIC777 wrote:

The US needs another budget airline?

Actually, yes...
There are plenty of airports and routes out there, and any competition for the US4 is welcomed. Competition inspires good customer services, something very lacking on US airlines these days.
The toughest part is getting around the loyalty plans.

True, competition is good, but I think in the US airline industry, competition just inspires lower fares and less service. And it seems like every US airline is already trying to be a "budget" airline anyway.

KRIC777 wrote:

True, competition is good, but I think in the US airline industry, competition just inspires lower fares and less service. And it seems like every US airline is already trying to be a "budget" airline anyway.

You prefere higher fares and less service instead?

Someone83 wrote:

KRIC777 wrote:

True, competition is good, but I think in the US airline industry, competition just inspires lower fares and less service. And it seems like every US airline is already trying to be a "budget" airline anyway.

You prefere higher fares and less service instead?

No I don't. The response to my original reply was that more competition was a good thing because it inspires good customer service. My point was that in in this case, I believe competition will only inspire lower fares - NOT good customer service (and if anything, LESS service) because most customers don't care about service NEARLY as much as they care about the fare. Better service costs money, and for airlines there is little to be gained by improving service because most passengers won't pay more for it. I'm not saying that's good or bad, just stating my opinion.

Bring it on. Excited to see how this new venture unfolds. Is it me or does it sound like they are looking to be something similar to WN?

Someone83 wrote:

KRIC777 wrote:

True, competition is good, but I think in the US airline industry, competition just inspires lower fares and less service. And it seems like every US airline is already trying to be a "budget" airline anyway.

You prefere higher fares and less service instead?

Many posters here seem to think that's what the public deserves.

A fool and his money are soon parted.

Can a ULCC provide good quality? Absolutely! However, it requires investing some of those profits to keep the product good. From what I see, most of the current ULCC's could care less about a quality product.

Spirit however seems to be doing something about it. I am hearing their on time performance and reliability is improving! Which leave me thinking they are investing into making the operation better. Can anyone confirm if my suspicion is true?

Didn’t he leave UA on bad blood?

I applaud the effort to bring in more competition. I would imagine if this airline ever gets off the ground, it’ll be in the same class as NK, G4, and F9. I doubt a bean counter from Allegiant would put much thought in quality product development.

F9Animal wrote:

Can a ULCC provide good quality? Absolutely! However, it requires investing some of those profits to keep the product good. From what I see, most of the current ULCC's could care less about a quality product.

Spirit however seems to be doing something about it. I am hearing their on time performance and reliability is improving! Which leave me thinking they are investing into making the operation better. Can anyone confirm if my suspicion is true?

Investing in employees is investing in a good product. Southwest proved it.

All I have to say about this venture is....WOW.

Guesses as for routes:

Houston to
- DAL
- LGB/ONT
- CLE
- PBI
- COS
- MEM
- RIC
- GYY


This seems to be like the type of airline to operate the secondary markets, so COS, LGB, PBI, GYY, and RIC seem to make sense. The rest are dehubbed airports or local (dal).

emuwarveteran wrote:

"the U.S. airline industry needs another budget airline" lol what

Like it needs a hotel in the head.

With Moxy or whatever Neeleman calls it starting in a couple years and now this new airline getting in the game where are these guys finding pilots? You can’t train them faster. 1,500 hours is 1,500 hours.

Gulfstream500 wrote:

Guesses as for routes:

Houston to
- DAL
- LGB/ONT
- CLE
- PBI
- COS
- MEM
- RIC
- GYY


This seems to be like the type of airline to operate the secondary markets, so COS, LGB, PBI, GYY, and RIC seem to make sense. The rest are dehubbed airports or local (dal).

Just because they are Houston-based doesn't mean they will be Houston-centric. The Houston area seems serve3d well enough by all other carriers and there are better areas to start in IMO.

mtnwest1979 wrote:

Gulfstream500 wrote:

Guesses as for routes:

Houston to
- DAL
- LGB/ONT
- CLE
- PBI
- COS
- MEM
- RIC
- GYY


This seems to be like the type of airline to operate the secondary markets, so COS, LGB, PBI, GYY, and RIC seem to make sense. The rest are dehubbed airports or local (dal).

Just because they are Houston-based doesn't mean they will be Houston-centric. The Houston area seems serve3d well enough by all other carriers and there are better areas to start in IMO.

I heard Austin is nice.

WeatherPilot wrote:

With Moxy or whatever Neeleman calls it starting in a couple years and now this new airline getting in the game where are these guys finding pilots? You can’t train them faster. 1,500 hours is 1,500 hours.

Go after the students at the 141 schools that can get a thousand hour waiver...that’s the new trend

agreed, i dont see anything where it says the routes are all out of Houston.

KRIC777 wrote:

Someone83 wrote:

KRIC777 wrote:

True, competition is good, but I think in the US airline industry, competition just inspires lower fares and less service. And it seems like every US airline is already trying to be a "budget" airline anyway.

You prefere higher fares and less service instead?

No I don't. The response to my original reply was that more competition was a good thing because it inspires good customer service. My point was that in in this case, I believe competition will only inspire lower fares - NOT good customer service (and if anything, LESS service) because most customers don't care about service NEARLY as much as they care about the fare. Better service costs money, and for airlines there is little to be gained by improving service because most passengers won't pay more for it. I'm not saying that's good or bad, just stating my opinion.

Come to Australia then where there are only two domestic full service airlines. An hour in a recliner J costs $1000+ one way between Syd - Mel despite there being 160+ frequencies in a day. But hey at least you get “good service”.

WeatherPilot wrote:

With Moxy or whatever Neeleman calls it starting in a couple years and now this new airline getting in the game where are these guys finding pilots? You can’t train them faster. 1,500 hours is 1,500 hours.

There are plenty of regional captains and FOs with thousands of hours trying to get out who will go. All they gotta do is pay a little more than regionals. I don’t see that as an issue. Scumbag regional outfits still have pilots filling RJ seats.

downdata wrote:

Come to Australia then where there are only two domestic full service airlines. An hour in a recliner J costs $1000+ one way between Syd - Mel despite there being 160+ frequencies in a day. But hey at least you get “good service”.

You can routinely buy MEL-SYD for $50. That is amazing value. You can also get a first class ticket tomorrow for under $500.

In my travels I've found Australia to be one of the most affordable air markets (Domestically).

Rdh3e wrote:

downdata wrote:

Come to Australia then where there are only two domestic full service airlines. An hour in a recliner J costs $1000+ one way between Syd - Mel despite there being 160+ frequencies in a day. But hey at least you get “good service”.

You can routinely buy MEL-SYD for $50. That is amazing value. You can also get a first class ticket tomorrow for under $500.

In my travels I've found Australia to be one of the most affordable air markets (Domestically).

LAX - SFO costs substantially less. As are JFK - BOS. And they have far less frequencies than MEL - SYD.

TC957 wrote:

The words " high-quality " " extremely low fare " " basic transportation " don't mix too well in the airline industry.
It's either high quality or low fare and basic - he needs to decide which.

No CEO is going to tell you, “ohhh our product is really shitty that general public likes a lot” Every CEO even ULCC is going to tell you, we have “high” quality product with great affordable prices. And in reality they have, but only general public usually buys shittiest one.

US does need new ULCC airlines. But in reality, is there enough of space so big guys don’t squeeze you out of market immediately. I saw Allegiant presentation future potential US intercity markets and there is market for new airlines in US. In reality it depends on the team, experience and at the end pure luck. Canada is going to be interesting, we are going to see what ULCC players might do in that area. Moxy is going to be interesting, I wish this guys a successful start of new airlines.

TC957 wrote:

The words " high-quality " " extremely low fare " " basic transportation " don't mix too well in the airline industry.
It's either high quality or low fare and basic - he needs to decide which.

Spirit Airlines, which has turned its quality reputation around tremendously, is proving otherwise.

I don't get the obsession with new market entrants in the US getting constantly poo-poo'd...it's as if the fanboy army here on a.net is afraid. So bizarro...

airportugal310 wrote:

I don't get the obsession with new market entrants in the US getting constantly poo-poo'd.

Probably because you mistake basic statements of fact with... how'd you put it?... "poo-poo."

The fact is, despite some on this site's ridiculous protests to the contrary: the market is extremely competitive, with 3 global legacy carriers + 1 regional legacy carrier, a nationwide LCC, a large east coast and transcon LCC, a large Hawaiian carrier, and two large ULCCs. There's not many niches in the market left unfilled, and most who've tried have met miserable demises in short order.

The last airline to launch and organically grow to major ($1B+ annual revenue), was launched 20yrs ago. That's not to say that no one could do it again, but the chances of that happening, are slim. Hence the reaction you see.

MAH4546 wrote:

TC957 wrote:

The words " high-quality " " extremely low fare " " basic transportation " don't mix too well in the airline industry.
It's either high quality or low fare and basic - he needs to decide which.

Spirit Airlines, which has turned its quality reputation around tremendously, is proving otherwise.

Sure, they’ve made some operational improvements, but they remain the most complained about airline in 2018 per DOT.

downdata wrote:

Rdh3e wrote:

downdata wrote:

Come to Australia then where there are only two domestic full service airlines. An hour in a recliner J costs $1000+ one way between Syd - Mel despite there being 160+ frequencies in a day. But hey at least you get “good service”.

You can routinely buy MEL-SYD for $50. That is amazing value. You can also get a first class ticket tomorrow for under $500.

In my travels I've found Australia to be one of the most affordable air markets (Domestically).

LAX - SFO costs substantially less. As are JFK - BOS. And they have far less frequencies than MEL - SYD.

You are incorrect. The Bay to the Basin has the most frequency of any city pair in the entire world. In April this year there are 190 daily round trips. That's about double the Melbourne to Sydney frequency.

Again, you can go buy a ticket for tomorrow in MEL-SYD for $50, doing the same for LAX-SFO is triple that, currently at $150.

LAX772LR wrote:

airportugal310 wrote:

I don't get the obsession with new market entrants in the US getting constantly poo-poo'd.

Probably because you mistake basic statements of fact with... how'd you put it?... "poo-poo."

The fact is, despite some on this site's ridiculous protests to the contrary: the market is extremely competitive, with 3 global legacy carriers + 1 regional legacy carrier, a nationwide LCC, a large east coast and transcon LCC, a large Hawaiian carrier, and two large ULCCs. There's not many niches in the market left unfilled, and most who've tried have met miserable demises in short order.

The last airline to launch and organically grow to major ($1B+ annual revenue), was launched 20yrs ago. That's not to say that no one could do it again, but the chances of that happening, are slim. Hence the reaction you see.

Thanks for the perspective on that! I won't argue that the U.S. has 'enough' carriers (how many is enough?) but major markets are all competitive. Sure, somebody can point to high fares on a route like PWM-Billings, but that's flown by so few people every day that in a market of 800 million passengers annually it rounds down to nothing.

A new carrier is going to need to start with money - lots of money, like B6 did 20 years ago. This guy's goal of $100 million needs another digit. If you think that's too high a barrier entry, well, the U.S. is a very big market. Venture cap funds and Warren Buffet can find $1 Billion under their sofa cushions.

Good luck to them! Give us a killer livery too.

I thought April Fools Day was over

MIflyer12 wrote:

LAX772LR wrote:

airportugal310 wrote:

I don't get the obsession with new market entrants in the US getting constantly poo-poo'd.

Probably because you mistake basic statements of fact with... how'd you put it?... "poo-poo."

The fact is, despite some on this site's ridiculous protests to the contrary: the market is extremely competitive, with 3 global legacy carriers + 1 regional legacy carrier, a nationwide LCC, a large east coast and transcon LCC, a large Hawaiian carrier, and two large ULCCs. There's not many niches in the market left unfilled, and most who've tried have met miserable demises in short order.

The last airline to launch and organically grow to major ($1B+ annual revenue), was launched 20yrs ago. That's not to say that no one could do it again, but the chances of that happening, are slim. Hence the reaction you see.

Thanks for the perspective on that! I won't argue that the U.S. has 'enough' carriers (how many is enough?) but major markets are all competitive. Sure, somebody can point to high fares on a route like PWM-Billings, but that's flown by so few people every day that in a market of 800 million passengers annually it rounds down to nothing.

A new carrier is going to need to start with money - lots of money, like B6 did 20 years ago. This guy's goal of $100 million needs another digit. If you think that's too high a barrier entry, well, the U.S. is a very big market. Venture cap funds and Warren Buffet can find $1 Billion under their sofa cushions.

$100M is adequate to start with a handful of used airplanes. That’s how much B6 had to start with new airplanes.

GalebG4 wrote:

TC957 wrote:

The words " high-quality " " extremely low fare " " basic transportation " don't mix too well in the airline industry.
It's either high quality or low fare and basic - he needs to decide which.

No CEO is going to tell you, “ohhh our product is really shitty that general public likes a lot”.

That's pretty much exactly what the Spirit CEO said when challenged about their flying experience.

intotheair wrote:

Didn’t he leave UA on bad blood?

I applaud the effort to bring in more competition. I would imagine if this airline ever gets off the ground, it’ll be in the same class as NK, G4, and F9. I doubt a bean counter from Allegiant would put much thought in quality product development.

I don't know if that was the case, per se, but I did hear on a reliable source that he was at odds with the former AA cabal when they came onboard, namely Kirby. Levy wanted to run UA like Allegiant--skinflint and frugal, including getting rid of domestic FC altogether (yes, that was actually a cockamamie idea, since most were upgrades and not purchased, he saw no added value, and couldn't be more wrong about something like that).

And then UA did the strange bifurcation of their CFO positions, which may have been the beginning of the end. Still, Levy did good work in pushing a used aircraft strategy for some fleet growth, which on the surface, I'd have thought would be exactly in line with Kirby's pronouncements about growing the network and building hubs up. Oh well.

I wish him well, but starting a new airline is a risky proposition on a good day.

Rdh3e wrote:

downdata wrote:

Rdh3e wrote:

You can routinely buy MEL-SYD for $50. That is amazing value. You can also get a first class ticket tomorrow for under $500.

In my travels I've found Australia to be one of the most affordable air markets (Domestically).

LAX - SFO costs substantially less. As are JFK - BOS. And they have far less frequencies than MEL - SYD.

You are incorrect. The Bay to the Basin has the most frequency of any city pair in the entire world. In April this year there are 190 daily round trips. That's about double the Melbourne to Sydney frequency.

Again, you can go buy a ticket for tomorrow in MEL-SYD for $50, doing the same for LAX-SFO is triple that, currently at $150.

I don't know where you are getting your data from but there are 213 flights tomorrow SYD-MEL/AVV and about 340 SFO/SJC/OAK-LAX/BUR/ONT/LGB/SNA.

Average gauge is much larger on SYD-MEL though, and overall there are more seats available on SYD-MEL/AVV than Bay Area-Basin. This is despite LA+SF+SJC having a population that is more than double SYD+MEL.

None of this changes that Australia is one of the most expensive air markets in the world. You can pick one data point to prove any point, but average fairs are much higher than the USA.

RyanairGuru wrote:

I don't know where you are getting your data from but there are 213 flights tomorrow SYD-MEL/AVV and about 340 SFO/SJC/OAK-LAX/BUR/ONT/LGB/SNA.

Average gauge is much larger on SYD-MEL though, and overall there are more seats available on SYD-MEL/AVV than Bay Area-Basin. This is despite LA+SF+SJC having a population that is more than double SYD+MEL.

None of this changes that Australia is one of the most expensive air markets in the world. You can pick one data point to prove any point, but average fairs are much higher than the USA.

Cite any sources for airfare? I'm giving you real comparisons, you could at least do the same and show some data. Also, your flight stats are incorrect. There are 99 flights April 4th from AVV/MEL to SYD. from MEL: 43 QF, 27 VA, 14 JQ, 9 TT plus 6 JQ from AVV.

LAX772LR wrote:

The fact is, despite some on this site's ridiculous protests to the contrary: the market is extremely competitive, with 3 global legacy carriers + 1 regional legacy carrier, a nationwide LCC, a large east coast and transcon LCC, a large Hawaiian carrier, and two large ULCCs. There's not many niches in the market left unfilled, and most who've tried have met miserable demises in short order.

In addition to your list, I'd add Levy's own G4 which this new venture sounds remarkably similar to. I know this is all very early-stage but I'd be interested to see how he plans on distinguishing this new airline from G4 or even Moxy. Realistically, how much more non-incrementalinnovation is there to be made in the US airline sector short of an actual technological revolution?

downdata wrote:

KRIC777 wrote:

Someone83 wrote:

You prefere higher fares and less service instead?

No I don't. The response to my original reply was that more competition was a good thing because it inspires good customer service. My point was that in in this case, I believe competition will only inspire lower fares - NOT good customer service (and if anything, LESS service) because most customers don't care about service NEARLY as much as they care about the fare. Better service costs money, and for airlines there is little to be gained by improving service because most passengers won't pay more for it. I'm not saying that's good or bad, just stating my opinion.

Come to Australia then where there are only two domestic full service airlines. An hour in a recliner J costs $1000+ one way between Syd - Mel despite there being 160+ frequencies in a day. But hey at least you get “good service”.

Yes, and at least on Virgin Australia there was not good service. Horrible delays with rude staff between MEL and SYD this week. Also, there planes were dirty, no IFE and worse snack than what Delta provides all for more money. Air New Zealand was amazing though and worth extra money for the comfort level.

Gulfstream500 wrote:

Guesses as for routes:

Houston to
- DAL
- LGB/ONT
- CLE
- PBI
- COS
- MEM
- RIC
- GYY


This seems to be like the type of airline to operate the secondary markets, so COS, LGB, PBI, GYY, and RIC seem to make sense. The rest are dehubbed airports or local (dal).

Waiting for someone to go full bore into the one stop, no plane change model that WN utilizes. MEM could fit that stop in the middle well.

Example:

http://www.gcmap.com/mapui?P=Hou-mem-cvg&MS=wls&DU=mi

slider wrote:

intotheair wrote:

Didn’t he leave UA on bad blood?

I applaud the effort to bring in more competition. I would imagine if this airline ever gets off the ground, it’ll be in the same class as NK, G4, and F9. I doubt a bean counter from Allegiant would put much thought in quality product development.

I don't know if that was the case, per se, but I did hear on a reliable source that he was at odds with the former AA cabal when they came onboard, namely Kirby. Levy wanted to run UA like Allegiant--skinflint and frugal, including getting rid of domestic FC altogether (yes, that was actually a cockamamie idea, since most were upgrades and not purchased, he saw no added value, and couldn't be more wrong about something like that).

And then UA did the strange bifurcation of their CFO positions, which may have been the beginning of the end. Still, Levy did good work in pushing a used aircraft strategy for some fleet growth, which on the surface, I'd have thought would be exactly in line with Kirby's pronouncements about growing the network and building hubs up. Oh well.

I wish him well, but starting a new airline is a risky proposition on a good day.

Wow! I’d never heard that one before. Nobody has to go too far back in UA history to understand the value of domestic F — just look at how Ted pissed off elites while not even substantially reducing costs.

FlyingElvii wrote:

There are plenty of airports and routes out there,

What cities aren't served where there is notable population? Didn't we hear this same dance with Metropolitan Airways......

Metropolitan Airways Plans to Offer Business Flights at Detroit City Airport in 2018

http://www.dbusiness.com/daily-news/Annual-2017/Metropolitan-Airways-Plans-to-Offer-Business-Flights-at-Detroit-City-Airport-in-2018/

WaywardMemphian wrote:

Gulfstream500 wrote:

Guesses as for routes:

Houston to
- DAL
- LGB/ONT
- CLE
- PBI
- COS
- MEM
- RIC
- GYY


This seems to be like the type of airline to operate the secondary markets, so COS, LGB, PBI, GYY, and RIC seem to make sense. The rest are dehubbed airports or local (dal).

Waiting for someone to go full bore into the one stop, no plane change model that WN utilizes. MEM could fit that stop in the middle well.

Example:

http://www.gcmap.com/mapui?P=Hou-mem-cvg&MS=wls&DU=mi

That’d be interesting, but I think unless ops of that nature are concentrated at a hub in MEM the economies of scale (aircraft service etc.) would evaporate. The only real competitive advantage that tends to pop up in this industry is cost structures achieved through economies of scale from hubs. In the case of an LCC where the focus is on reducing costs, I don’t think a point to point shuttle network with one stops would work unless those stops were concentrated at a hub.