End of federal aid gave airline startups a boost: Avelo exec
Generous federal aid to US airlines during the pandemic delayed and deferred the industry restructuring that had just started as the crisis began, startup Avelo’s new CFO says, arguing that as the industry restructures, even more opportunities for new entrants exist. “I don’t want to use the word ‘disrupt,'” Hunter Keay, who took Avelo’s financial helm on February 23, said. “The [Payroll Support Program] deferred a lot of potential restructuring that we’ll see over the next few years; there will be a few pieces moved around the chessboard.” Federal aid through 2020’s CARES Act and subsequent coronavirus aid packages required airlines that took the funds to pledge not to furlough or lay off employees and to continue operating to all their pre-pandemic destinations. In practice, most airlines offered voluntary buyouts and separation to employees, and several applied for temporary exemptions to drop service to cities already well connected by other airlines, or from nearby airports. When the aid expired on September 30 last year, airlines began to rationalize their networks, cutting flights to dozens of cities. When Avelo launched last year, CEO and founder Andrew Levy said the changing industry landscape was the perfect opportunity to launch a new airline. Aircraft were available and cheap. The buyouts opened a large pool of airline talent. And slots at airports were easier to come by, he said. The end of federal air only will accelerate the industry’s transformation. Story has more.<br/>
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End of federal aid gave airline startups a boost: Avelo exec
Generous federal aid to US airlines during the pandemic delayed and deferred the industry restructuring that had just started as the crisis began, startup Avelo’s new CFO says, arguing that as the industry restructures, even more opportunities for new entrants exist. “I don’t want to use the word ‘disrupt,'” Hunter Keay, who took Avelo’s financial helm on February 23, said. “The [Payroll Support Program] deferred a lot of potential restructuring that we’ll see over the next few years; there will be a few pieces moved around the chessboard.” Federal aid through 2020’s CARES Act and subsequent coronavirus aid packages required airlines that took the funds to pledge not to furlough or lay off employees and to continue operating to all their pre-pandemic destinations. In practice, most airlines offered voluntary buyouts and separation to employees, and several applied for temporary exemptions to drop service to cities already well connected by other airlines, or from nearby airports. When the aid expired on September 30 last year, airlines began to rationalize their networks, cutting flights to dozens of cities. When Avelo launched last year, CEO and founder Andrew Levy said the changing industry landscape was the perfect opportunity to launch a new airline. Aircraft were available and cheap. The buyouts opened a large pool of airline talent. And slots at airports were easier to come by, he said. The end of federal air only will accelerate the industry’s transformation. Story has more.<br/>
