Nope, fortunately it’s not Jeff Smisek.
A new low cost carrier could be launching this year
Andrew Levy is United’s former CFO, and prior to that was the President of Allegiant Travel. He abruptly resigned at United in 2018, leaving many to wonder if there was more to the story.
Well, it has now been revealed that Levy plans to launch a low cost carrier in the US, and it could be flying as soon as late 2019 or early 2020. He’s working on securing $100 million in funding by June for his new Houston-based company.
As explained by Bloomberg, the airline already has a Part 121 commercial airline certification, which is needed to launch operations. That’s because he purchased XTRA Airways, which is a Florida-based charter airline with a single 737-400 (this is the carrier that operated Hillary Clinton’s 2016 campaign plane). This will make the process of getting started easier.
What will make this airline different?
The plan is to operate primarily to secondary markets. While they haven’t decided on an aircraft type, they’re leaning towards leasing Boeing 737-800s, and configuring them with 189 seats. For context, Ryanair has 189 seats on their 737-800s, while Southwest only has 175 seats, so these planes would be densely configured.
We already have a lot of budget airlines in the US — Allegiant, Frontier, Spirit, etc. — so what will make his new airline different?
“We think the opportunity exists for a real high-quality, highly reliable, extremely low fare, basic transportation service.”
He claims the airline will offer “a better product and experience but still offer really low prices.”
Levy recognizes the product needs to be different than competitors, so he would hope to innovate parts of the experience to differentiate the airline from Allegiant or Spirit. This would include a simplified fee structure.
As mentioned above, the airline would fly to secondary markets. This isn’t just about flying to lower cost airports, but rather to create a “defensible” route network, that isn’t threatened by the “big” carriers. So he hopes to create demand for new air travel by operating routes that are underserved.
How does this compare to Moxy?
This isn’t the only new start-up airline in the US. We also know that JetBlue co-founder David Neelman plans to launch a US low cost carrier named Moxy, operating Airbus A220 aircraft. However, this new carrier from Levy could launch before that.
Moxy also plans to launch flights to secondary markets, serving markets like Providence, Rhode Island, Fort Worth Texas, and Burbank, California.
Interestingly Moxy plans to offer spacious seats and free Wi-Fi, so in terms of product it should be different than Levy’s airline (which is most definitely not offering spacious seats).
The US airline industry sure could use some more competition to keep the “big guys” honest, so I wish Levy all the best. There are still lots of details to be ironed out, though in general it looks like the plan is to fly densely configured aircraft between secondary markets with a straightforward fee structure.
I appreciate that Levy recognizes the need to be different than what’s already out there, though it remains to be seen how different the execution actually is.
What do you make of this new startup concept?
(Featured image courtesy of Owen O’Rourke)