Low-cost U.S. airline Avelo raises $ 42 million in new funding

CHICAGO, Jan.6 (Reuters) – Avelo Airlines, a super low-cost airline founded by a former United Airlines executive, on Thursday announced it had raised $ 42 million in a Series B funding round led by an investment fund managed by Morgan Stanley.

The Texas-based airline, which began flights last April, had raised $ 125 million in January 2020. Avelo currently flies to 19 popular destinations across the United States with six Boeing (BA.N) Next-Generation 737s. .

In an interview, Avelo founder and CEO Andrew Levy said the company plans to add nine more 737s to its fleet by the end of the year, as it plans to serve at least 40 cities. in the USA.

Register now for FREE and unlimited access to Reuters.com

Register now

The carrier has seen an increase in ticket cancellations in recent weeks following an increase in COVID-19 infections caused by the Omicron variant. Levy, however, said the company was “cautiously optimistic” that travel demand will pick up once COVID-19 cases start to decline.

“People’s buying behavior is really keeping up with the news of the virus,” said Levy, co-founder and former president of low-cost airline Allegiant Airlines and chief financial officer of United Airlines. “The demand for travel is massive.

Avelo plans to hire more than 450 crew members this year. But attracting talent in a tight labor market has been “really difficult,” Levy told Reuters.

The company has had to raise salaries for its pilots, flight attendants and airport staff and is under pressure to offer similar increases to other groups of employees.

“You have to compete for talent like everyone else does,” Levy said.

Register now for FREE and unlimited access to Reuters.com

Register now

Reporting by Rajesh Kumar Singh; Editing by David Gregorio

Our Standards: Thomson Reuters Trust Principles.

Comments are closed.