The ex-CFO of United Continental Holdings, Inc. is speculating that the U.S. airline sector requires another airline that is affordable. Andrew Levy—who also assisted in establishing Allegiant Travel Company—is collecting funds for a new low-cost forte carrier developed to serve secondary airports by a reliable experience that deviates from present players in the market. Levy said, “We believe the opportunity is there for a real highly reliable, high-quality, extremely low cost, and basic transportation service.”
The airline—which is not been named yet—would provide “a better experience and product but still has really low prices,” he stated, correlating the endeavor to the past know-how of Southwest Airlines. “I feel that Southwest Airlines had that for many years,” Levy said. The Houston-based firm has not settled on an aircraft type but is inclining to lease Boeing’s 737-800, given the global grounding of the company’s latest 737 Max. The airplanes will seat 189 passengers, which is a high-density approach meant for helping the company to offer fares under the industry average.
Recently, Southwest Airlines was in news as its stock might bottom out very soon. It has not been a good year for Southwest Airlines. The company’s stock had its difficulties, but so have many airlines stocks. Airline stocks began in a downward trend from January 2019 for a variety of reasons. Two crashes of Boeing 737 MAX did not help the matter. Higher oil costs, which improved and are $60 per barrel is another large-scale tailwind that adds up to costs for airlines. Reportedly, Southwest Airlines estimated revenue progress in the single digits of 3%–4% in its recent 8-K, which it filed a few weeks ago. The estimation is slightly less than its annual progress rate of 7.2%. To shorten the gap, the airline added up a net 25 aircrafts, increased its ASM (available seat miles) to 5% with almost half of that assigned to Hawaii.