United’s former Chief Financial Officer, Andrew Levy, wants to start a budget airline to serve secondary airports in the USA.
Levy also helped to establish Allegiant Air, but hopes to establish a more “reliable” airline than the current batch of low-cost competitors.
Speaking to Bloomberg, Levy said:
We think the opportunity exists for a real high-quality, highly reliable, extremely low fare, basic transportation service.
He added that it will offer “a better product and experience but still offer really low prices,” alluding to the success of Southwest Airlines.
How about other details? Recall that Levy purchased XTRA Airways Inc. last summer and gutted it. All but one of the charter carrier’s aircraft were sold.
A single 737-400 was kept just to keep the commercial airline certification active. Now he is looking to raise $100MN to get the new airline up and running. Service may begin as early as this year, but likely next year with five aircraft. Levy plans to use Boeing 737-800 aircraft with a “high density” configuration.
If all this sounds like an attempt to re-create the wheel, Levy has an answer for that as well.
You have to do something different. The idea that you can come in and just do what others do but just do it better, I don’t buy that.
Doing the same thing as everyone else, but trying to do it better, hasn’t worked, historically, very well in the airline industry. So that’s certainly not what we’re trying to do, is out-Spirit Spirit or out-Allegiant Allegiant or anybody else like that. We aim to do something that’s different.
So what will that be? Levy’s lips are sealed for now, though he hopes to offer a more simplified fee structure than Frontier or Spirit. He also wants to steer clear of fortress hubs and other legacy airline strongholds.
Perhaps Warren Buffet now has an airline to buy…?
> Read More: Warren Buffett’s Delta “Mistake”
CONCLUSION
Levy is not the only entrepreneur planning a new budget carrier for the U.S. market. I’ve written before about JetBlue founder David Neeleman’s plan for Moxy Airways, with a similar business model. Will Levy’s plan succeed? It’s too early to say, but the graveyard of budget carriers continues to grow.
Listen to Levy discuss his new carrier on WBUR here.
> Read More: Coming Soon, Moxy Airways?
image: United Airlines
Yup. Too much consolation in the airline space. Bush and Obama screwed up.
Now new competitors are still serve people fed up with big 3
You’ve got a typo where you quoted Levy, you missed a y in ‘industry’
Thanks.
This is the last thing that we need. The reason why he is so cryptic is because he has no idea how he is going to differentiate. This is the height of arrogance when someone assumes that if they start from scratch they can “do it better” than all the others. There are so many reasons why airlines are the way that they are today, from the big 3 all the way down to Allegiant. Starting from scratch is not going to protect the airline from all of the exogenous factors that make the industry what it is today.
How is it the last thing we need? More details please….
I am not surprised he is being cryptic given he the environment and competition. Why show your hand immediately just because his investor sheet got leaked.
New aircraft, low maintenance costs, entry level crew wages, incentives to serve markets, steal a little bit of market share in height density routes, do an IPO, watch competition retaliate including Moxy, share price declines, and we all know what happens next. Wash, rinse and repeat.