New low-fare airlines take to skies amid recovery

The first new U.S. air carriers in 14 years are vying for a slice of air travel's rebound as the industry emerges from its worst downturn in history.

For more than a year, a global pandemic laid waste to aviation. U.S. carriers last year lost about $35 billion in revenue and shed more than 66,000 employees -- through retirements, voluntary departures and other means -- despite receiving billions from the federal government.

In the aftermath, pent-up demand is fueling a travel surge: The Transportation Security Administration recently has screened more than 2 million daily passengers, the most since the start of the pandemic. Analysts say they don't expect numbers to reach pre-pandemic levels until at least 2023, but a rise in vaccination rates and a dwindling number of coronavirus infections have previously homebound Americans looking to the skies.

David Neeleman and Andrew Levy, two industry executives who are facing off in a battle of new ultra-low-cost carriers, say recovery from the pandemic has created an ideal moment to get into the airline business.

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"There couldn't be better timing for what we're trying," said Neeleman, founder of Breeze Airways.

Breeze and Avelo Airlines are the nation's first new airline startups since Virgin America, which made a splashy debut in 2007 before being acquired by Alaska Airlines nine years later. Even during a pandemic, there are plenty of players willing to get into the game: Aircraft leasing firm Avolon estimates the new U.S. carriers are among more than 100 airline startups worldwide.

The pandemic's disruption has created opportunities for entrepreneurs in the airline sector as it has for other industries, said Jeff Reid, founding director of Georgetown Entrepreneurship and a professor at Georgetown's McDonough School of Business.

Utah-based Breeze is the fifth airline venture from Neeleman, a seasoned entrepreneur who launched JetBlue Airways in 1998. Breeze began flying in May, servicing 16 cities in the South, Midwest, Southeast and Eastern part of the country, launching with fares starting at $39 one-way.

Avelo, which began service in April with one-way fares as low as $19 from its base at Hollywood Burbank Airport in Southern California, is focusing service on the West Coast. Levy, the carrier's founder and president, said he is bullish on the timing as travel demand surges.

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