America's Boom in New Budget Airlines Reveals a Positive Outlook in Air Travel

A number of new low-cost carriers are bucking trends and taking to the skies

Avelo Air

Courtesy of Avelo

We’re dedicating our December features to examining the biggest travel trends of 2021. Read on for our collection of stories that take a look at the shifts driving the future of travel, including the rise of new budget airlines, major overhauls of airline loyalty programs, the growing popularity of “adult study abroad” programs, and a look ahead at the top travel and outdoor gear trends of 2022. 

The last year may have been tough on travel, but there is one sector that has managed to flourish despite an ongoing pandemic: budget airlines. 

During a year of light passenger loads and quiet airports, several new low-cost carriers have taken to the skies as some familiar names have expanded their offerings. Travelers are benefitting not just from these airlines' low fares but also from new routes connecting previously underserved markets and from increased competition for their attention. 

The latest crop of budget airlines serves smaller markets more frequently used as gateways by leisure travelers. "They're connecting these uncommon routes like Southwest in the 1990s instead of trying to compete one-to-one with legacy carriers," said Willis Orlando, whose job is to scout out the best flight deals for Scott's Cheap Flights

Instead of flying through airports like John F. Kennedy International Airport, Chicago O'Hare International Airport, and Los Angeles International Airport, these carriers are focusing their efforts on places like New Haven, Connecticut; Akron, Ohio; Tampa, Florida; and Burbank, California. 

Breeze Airways, a new domestic airline from JetBlue founder David Neeleman, launched operations in May. It serves markets including Akron, Louisville, Tulsa, and Tampa. Avelo Airlines, whose founder Andrew Levy was the chief operating officer of budget carrier Allegiant Air, launched in April, focusing on underserved leisure destinations like national parks and cultural hubs. 

Avelo is the only airline currently flying from New Haven, Connecticut, and Fort Collins, Colorado. "We have intentionally selected routes and airport pairings that do not have existing service," said Jim Olson, the company's head of communications. "The enthusiastic response we have received from these communities and the others Avelo serves is very encouraging." 

By the end of December, Avelo will serve 18 U.S. destinations. 

"The positive demand and booking trajectories we are seeing are the ultimate proof of concept," Olson said. "We are just getting started and look forward to adding more aircraft and even more beautiful and popular destinations."

Another brand, Aha!, took off in late October. The regional airline run by ExpressJet plans to connect Reno, Nevada, and the greater Lake Tahoe region with several cities across California, Oregon, and Washington. The company's name is an acronym for "air-hotel-adventure," a nod to its aspirations of selling vacation packages. 

In early 2022, California-based Airbahn plans to launch in California. Airbahn was founded by Tariq M. Chaudhary and his family, the majority owners of Pakistan's second-largest airline, Airblue. Chaudhary hopes to build a brand that will become California's hometown airline, much like Southwest has become Texas' hometown airline. The airline expects to establish a hub in Ontario, Long Beach, or Orange County, popular alternatives to LAX, and has already purchased its first plane.

"We've seen a real increase in the number of budget airlines and in the quality of those budget airlines," Orlando of Scott's Cheap Flights said. 

Several airlines now land in a space he describes as a "tweener" airline, carriers that operate like budget airlines but position themselves more like legacy carriers, often including seat reservations, luggage, and meals in ticket prices. 

In some ways, the pandemic has been less of a burden on these airlines than it has for their behemoth competitors. As major carriers have laid off flight crews and scaled back their route maps, new airlines have been able to hire their experienced former team members and cherry-pick the routes they'll serve in a market now driven more by leisure travel than business travel. 

And it's not just domestically that budget airlines are experiencing a resurgence. International competition also is increasing. Norse Atlantic Airways plans to offer budget flights between Oslo, London, Paris, and New York, Los Angeles, and Florida. 

Play, a new Icelandic airline stepping in to fill the gap left by the closure of WOW in 2019, launched in June, making its inaugural flight from London Stansted to Reykjavik's Keflavik International Airport. Play also flies between Iceland and Barcelona, Paris, Amsterdam, Berlin, Copenhagen, and Warsaw.

As major carriers have laid off flight crews and scaled back their route maps, new airlines have been able to hire their experienced former team members and cherry-pick the routes they'll serve in a market now driven more by leisure travel than business travel. 

While not a new airline, JetBlue has focused its low-cost expansion efforts on transatlantic travel, connecting London with New York. Finnair plans to add more flights from New York and Los Angeles next spring and is adding a new direct flight from Seattle-Tacoma International Airport to Helsinki-Vantaa Airport in Finland in June.

Meanwhile, French Bee, a Paris Orly-based long-haul carrier, has expanded its route map. French Bee now flies between San Francisco, Newark, and Paris and between San Francisco and Tahiti and Reunion Island. It plans to launch direct flights between Los Angeles and Paris in April. 

French Bee launched direct flights between Newark and Paris in July, shortly after the French government announced it would reopen its borders to U.S. tourists after over a year.  At the time, the company knew expanding during a pandemic was a risky move but did it anyway. 

"When we outlined the Newark to Orly launch plans, we knew we were taking a risk despite the restrictions in place," French bee president and CEO Marc Rocher said. 

And despite evolving travel restrictions amid an ongoing pandemic, the company has been pleasantly surprised by the warm welcome its new routes have received. "We were surprised we have seen so much response from the U.S. market as we are not very well known and new," Rocher said. 

As most airlines sharply cut their services during the pandemic, budget airlines bucked the trend, adding routes and increasing passenger capacities. The only three carriers that increased their passenger capacity during the pandemic were all budget airlines—Frontier, Spirit, and Allegiant. 

"They've been aggressive, increasing routes all around the world and putting a lot of downward pressure on airfares," said Orlando. 

Since Avelo entered the market, Orlando has seen legacy carriers cutting more deals on short-haul routes that are competitive with Avelo's, a trend he expects to continue. "Those airlines have no choice but to keep those fares low," he said.