“The best way to compete in the airline industry is to not compete.” – Andrew Levy
Former United CFO Plans New Airline
Former United Chief Financial Officer Andrew Levy plans a new airline of his own, one that won’t compete with other airlines and won’t offer many frills onboard. Yes, being boring is exactly the plan.
Levy and a group of investors bought a charter airline, XTRA Airways, in 2018. The airline shed all but ones of its aircraft and now operates as Houston Air Holdings Inc. Next week, it will take delivery of its first new aircraft, a leased Boeing 737-800 from General Electric.
Over time, it will build up a fleet of those jets, configuring them with 189 seats in a single-cabin of service. By the end of the year, Levy plans to launch commercial service.
The focus will be to offer nonstop service to “midsize and large” airports from so-called secondary airports that currently lack or offer limited commercial air service.
Levy is not new to airline startups, having co-founded Allegiant Air in 2002 and also serving on the board of Copa Airlines. In fact, Levy sees much to learn from Allegiant, telling Bloomberg:
“We’re going to build the company a little bit like Allegiant, slowly and steadily.”
Seeking to avoid the undercapitalization problem that has hurt so many airline startups, Levy promises the new airline will be have “far more capital than we think we’ll ever need.” Already, he has raised $125 million.
But in the end, the point is to serve markets that are underserved with basic, no-frills service.
“The best way to compete in the airline industry is to not compete.
“We’re not looking for world domination here. This is about offering choice and taking advantage of a market where the fare structure is relatively high.”
Levy seems extremely sober-minded in his vision of guarded growth. Only time will tell if such an airline can succeed when so many which have also tried that approach have failed.
But there is demand from secondary airports and offering a low-cost, limited service airline may indeed prove successful.
The airline plans to begin operations by the end of 2020.