Former United Airlines CFO Andrew Levy is launching a new carrier of his own. Budget airline Houston Air Holdings Inc. has already raised funds of $125 million and it plans to start flying before the year is over.
A humbler approach
Levy bought charter airline XTRA Airways in 2018 and now he is looking to transform it to offer something fresh for passengers. The businessman is looking to provide nonstop flights from secondary airports to midsize and larger markets.
The Los Angeles Times reports Levy is not looking to rival against the major global players with this company. Altogether, he wants to offer an alternative in the industry.
“The best way to compete in the airline industry is to not compete. I think that’s what we did at Allegiant, and that’s what we’re looking to do here,” Levy said.
“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.”
Not in any rush
Levy is looking to take his time and grow organically. The co-founder of Allegiant Travel is looking to replicate the growth pattern of the leisure travel firm with his new venture. Ultimately, he’s not looking to spend the airline’s capital at the first chance he gets.
The Texan outfit will take on a fleet of Boeing 737-300 aircraft, the first of which will be taken from General Electric’s lessor next week. This will be used for charter services over the summer before the expansion kicks off. These planes will be configured with 189 seats to serve wider operations later this year.
This news follows a similar announcement made by fellow airline specialist David Neeleman. He is set to offer an alternative approach to commercial services this year with Breeze. However, what differentiates the two models is that Levy seeks to concentrate on more short-haul flights compared with his counterpart.
The executive states that he will focus on niche markets that involve passengers that are price sensitive but are eager to avoid busy and large airports. However, even though this is a small niche, due to the size of the United States travel industry, this approach can enable great opportunities for the airline.
The money raised was provided by several private equity firms, family offices, and independent figures. Even though the company is officially titled Houston Air Holdings Inc., the actual brand name is yet to be determined.
It is also yet to finalize which airports it will serve. If the carrier wants to start flying this year, it will be eager to have these two aspects confirmed sooner than later.
Texas offers a large enough market for the airline in itself. With several underserved airports in the state, Levy could help connect passengers across the region. This would be the perfect starting point for the carrier.
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