Onetime United Airlines CFO Andrew Levy has announced plans to found a Houston-based low-cost carrier. The former UA executive says he is in the process of raising capital for a budget carrier which will focus on underserved destinations rather than going head-to-head with his former employer and the other well-established legacy carriers.
The former chief financial officer at United Continental Holdings says he is ready to get back into the airline game. Andrew Levy has confirmed that he is currently raising capital to start his own budget airline.
In public comments, Levy indicated that the unnamed airline will offer low fares, but will not rely on cost savings through the barebones service associated with many existing ultra-low-cost-carriers (ULCC). Instead, he envisions a business model closer to that of Southwest Airlines. Rather than taking the big three head-on, the new budget carrier will focus on underserved airports, thereby establishing a “defensible” niche market.
“You have to do something different,” Levy told Bloomberg’s Justin Bachman. “The idea that you can come in and just do what others do but just do it better, I don’t buy that.”
The new airline has already taken concrete steps to establish itself. Levy recently purchased the Florida-based charter airline XTRA Airways, which currently owns only a single Boeing 737-400 aircraft. More importantly, XTRA Airways maintains a Part 121 commercial airline certification, which would allow Levy’s proposed budget carrier to quickly clear key regulatory hurdles.
According to Levy, the new venture will likely begin operating with an initial fleet of five aircraft within the next twelve months. The airline hasn’t made any firm decisions about what type of planes will comprise that fleet, but Levy is leaning towards leasing Boeing 737-800 series planes which can be configured to seat 189 passengers. He admitted that Boeing’s recent troubles with its 737 MAX planes will be a factor when the airline begins shopping for aircraft.
Levy abruptly departed United Airlines less than a year ago after widely reported conflicts with other members of the management team. At the time of his resignation, the departing V.P. promised an exciting “next chapter” was on the horizon.
“As satisfying as this job has been, I am considering several exciting opportunities and will choose one in the coming weeks,” Levy told Forbes immediately following his unexpected departure from the airline group.
[Image Source: United Airlines]