How startup airlines are taking on the US market

Investing in airlines has traditionally been a risky proposition and yet, the aviation industry continues to have a gravitational pull that many entrepreneurs find difficult to resist.

Notably, even during the worst of the Covid-19 pandemic, there was no shortage of new airline projects taking shape, with fleets and carriers hemorrhaging cash worldwide.

Over the past few years, the US has proven to be particularly fertile ground for new operators. America may be a consolidated market as far as air travel is concerned, but startup airlines are quickly springing up whenever a market segment is deemed underserved by the authorities.

At least three startup airlines, each poised to challenge the status quo in their own way, have recently taken to the skies in the United States or are preparing to do so in the near future: Breeze Airways, Avello and Northern Pacific Airways.

But what difference did their founders see in the market? And what are their respective value propositions? Let’s take a look.

Breeze Airways

Breeze Airways is the latest venture of one of the most prolific and successful entrepreneurs in the international aviation scene.

When it comes to launching new airlines, Breeze Airways founder David Neeleman’s track record is second to none.

Before Breeze it launched no less than four other carriers in three different countries: Morris Air and JetBlue Airways in the US, WestJet in Canada and Azul in Brazil. At its peak, Nielemann temporarily managed and managed TAP Air Portugal and was a minority investor in French carrier Aigle Azur.

If JetBlue and Azul represented a transformative force in their respective markets, Neeleman now aims to do it all over again, only this time in a slightly different segment.

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Instead of facing the incumbent on its own turf, Breeze Airways is bypassing major hubs to connect second- and third-tier American airports that, until now, had little or no direct air connections between them.

To do so, the new airline is using relatively small Airbus A220-300s, configured to seat between 126 and 137 passengers, and, as a temporary stop-gap solution, even smaller Embraer E190s and E195s (another airline in Neelemann’s orbit is sourced from Azul. ).

It’s a similar approach followed by another airline in Europe that successfully pioneered this type of inter-regional low-fare concept, Barcelona-based Volotea, which later switched to Airbus A319s to use Boeing 717s.

Breeze appears to be following in the footsteps of JetBlue, which tweaked the traditional low-cost rulebook at launch to introduce what could be described as a hybrid product.

Low fares are one of Breeze’s tenets, but the new carrier also emphasizes being a “nice” carrier. To drive the point home, its three fare categories are named “Nice”, “Nicer” and “Nicest” based on the bundle of services you buy.

And, while the “coolest” product may be comparable to business class, even the more basic tiers benefit from some elements more commonly associated with premium products, such as the ability to change or cancel your ticket for free.

Avello Airlines

Interestingly, free changes and cancellations are a major selling point for other newcomers Avello Airlines.

This ultra low-cost carrier is the latest incarnation of a pre-existing charter operator called Xtra Airways, which entered the scheduled market after a change in ownership and a complete rebranding and relaunch.

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Avello, which defines its mission as “saving time and money for travelers”, operates a fleet of B737NG aircraft (both -700 and -800 versions) offering a bare-bones product (no food, drink or in-flight entertainment, but (if you’re willing to pay for it) although you can add some seating and luggage options for a fee.

Oddly enough, Avello operates not one, but two parallel networks, one on each coast of the United States, without any of its routes connecting them.

Northern Pacific Airways

Northern Pacific Airways, the third of the new airlines we’re looking at, aims to replicate what Icelandair has been doing for decades in the North Atlantic in the trans-Pacific market: offering a good-value intercontinental travel option, with the added attraction of doing so. A chance to explore an interesting place along the way.

The founders of Northern Pacific Airways are linked to America’s northernmost state through their earlier acquisition of the Ravana property. Ravn was Alaska’s largest regional airline when it went bankrupt during the COVID-19 pandemic. After relaunching Ravn and drawing up plans for its future growth as an electric aircraft operator, they began planning the next aviation adventure.

If Icelandair has found a viable niche for people flying between Europe and the Americas via Keflavik, North Pacific Airways wants to connect “Contiguous 48” to East Asia via Alaska.

The similarities don’t end there. Northern Pacific has also chosen the Boeing 757, Icelandair’s workhorse for decades, as its aircraft of choice. This is certainly not a state-of-the-art aircraft, but the combination of availability, capability and proven reliability at a reasonable price is expected to do the trick.

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The Alaskan Link is a key element of the project and the required stopover in Anchorage (ANC) is seen as a business opportunity and differentiator rather than a burden. Northern Pacific, in collaboration with the Alaskan tourism industry, plans to offer a number of products designed to help travelers explore and enjoy this vast arctic state during their stopover.

Although the idea seems straightforward enough, its implementation is not plain sailing.

Northern Pacific Airways unveiled its first aircraft in January 2022, but the launch of regular services has been repeatedly delayed as Covid-related travel restrictions in target markets Japan and South Korea have been delayed until later this year. As a result, operators in the Northern Pacific began to look for alternative ways to deploy their aircraft. A proposed service from Ontario, California to Mexico did not materialize and the airline’s management is subsequently looking for opportunities elsewhere.

In October, a Boeing 757 from Northern Pacific stopped in Saipan in the Northern Marianas en route to Alaska. The purpose of the trip was to explore the possibility of part of the North Pacific fleet being based in this US territory in the Pacific and acting as the archipelago’s home carrier under a wet lease agreement.

During a recent phone call, Northern Pacific CEO Rob McKinney confirmed that if the arrangement eventually goes ahead, the airline will most likely deploy a few planes to Saipan, with the rest allocated to Alaskan operations, as originally planned.

Regardless of its name, this would make this startup truly a pan-Pacific airline.


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