Avelo, a small low-cost airline, expands to 10 new U.S. cities

• Avelo Airlines continues to expand its fleet and routes, adding 10 new destinations on May 1.
• The newcomer emphasizes reliability, low fares and unique routes connecting small towns.
• As Avelo strives for its profitable third quarter, the CEO says the airline is focusing on itself.

When new low-cost carrier Avelo Airlines launched its first flight three years ago, it had just three next-generation Boeing 737s and served 11 destinations on the West Coast.

It has since grown to 52 coast-to-coast airports and 16 aircraft, with four more aircraft expected by the end of 2024.

This growing track record is helping Avelo climb the ranks of U.S. low-cost giants like Alaska Airlines as it continues its first full year of profitability after two very profitable quarters.

Business Insider spoke with Andrew Levy, CEO of Avelo, about what sets the growing airline apart from other low-cost carriers and what customers can expect on its planes.

New destinations and routes

Since the airline’s first flight between Burbank, Calif., and Sonoma County in the state’s northern wine country, it has expanded its network to 77 routes across 52 destinations, the spokesperson said of Avelo, Jim Olson.

Over the next two months, Avelo will launch 17 new routes connecting new and existing destinations.

Sonoma County, for example, will see its destinations double when Avelo opens its sixth air base on May 1, adding smaller markets like Boise Airport in Idaho and Glacier Park International Airport in Montana.

Among the 10 new destinations are Albany, Atlanta, Concord Airport near Charlotte, North Carolina, Destin, Houston Hobby, Knoxville, Lakeland in Central Florida, Miami, St. Louis and Traverse City, Michigan.

Lakeland, which is just over an hour’s drive from Orlando, will give travelers access to leisure spots like Walt Disney World or Universal Studios.

These additions align with Avelo’s core network strategy: providing underserved nonstop routes to primarily secondary markets with little or no competition from other airlines.

“We still have the lowest cost structure in the U.S. airline industry, and that’s really due to the way we’ve designed the company,” Levy said. “We’re going to these secondary airports that have less expensive entry and exit operations.”

For example, Avelo is the only airline serving New Haven in southern Connecticut, giving nearby travelers more convenient options than driving to New York, Hartford or Boston airports.

Reliability is “in our DNA”

As an airline launched amid the pandemic, Avelo CEO said it has faced countless challenges over the past three years that have impacted travel, including rising oil prices , supply chain issues and pilot shortages.

Throughout these struggles, Levy said the airline focused intensely on reliability, which was “a priority” for everyone in the company.

“It’s in our DNA,” Levy said. “It’s part of who we wanted to be when we started the business, and it’s part of who we are when we run it.”

Avelo ended 2023 as the No. 1 U.S. carrier in cancellation rates and second in on-time performance, according to market research firm Anuvu.

This trend continued in the first quarter of 2024, with Avelo ranking second in both categories. This puts Avelo ahead of low-cost competitors like JetBlue Airways in both areas.

Its cancellation rate is 0.13%, with low-cost giants like Spirit at 1.79% and Frontier at over 2%. These low-budget competitors, each with fleets of more than 100 people, have larger and more complex operations than Avelo.

No-frills planes and unbundled fares

Avelo said it has the lowest cost structure in the U.S. airline industry.

This is due to its round-trip scheduling, direct distribution, and simple plane structure, which means every add-on, like bags and snacks, comes with a fee.

The lighter seats and the a la carte method mean Avelo doesn’t have to pay for things it doesn’t need, and neither does the customer, reducing costs and, therefore, the price of tickets.

Avelo had the lowest average fare in the U.S. airline industry last year, according to Avelo’s assessment of other companies’ reports shared with BI.

Its average all-inclusive fare was $106, about $10 less than the next cheapest airline, Frontier, and 53% less than the U.S. industry average of $227.

However, Levy said Avelo competes more with legacy carriers and Alaska rather than Spirit or Frontier, which serve major airports with more competition than secondary markets.

But, generally speaking, he said he’s not worried about competition.

“I don’t really pay attention to these other airlines,” Levy said. “We just focus on ourselves.”

When it comes to baggage fees, however, Levy said he has “no doubt” that some customers want to pay less.

Passengers must pay $15 for priority boarding, $11 to $64 for advanced seat assignment with extra legroom, $125 for an in-cabin pet, $37 to $47 for checked bags, between $40 and $50 for a carry-on bag and a $100 fee if the checked bag weighs more than 50 pounds, according to Avelo.

“Everyone wants to pay less and get more,” Levy said. “So, would some people wish our baggage fees were lower? I have no doubt.”