New budget airlines take flight

Future. While the airline industry was grounded during COVID, a new fleet of budget airlines took flight, leveraging low costs to popular routes and simple tech innovations to pull ahead. In order to keep disrupting, new airlines like Breeze or Avelo could offer financial innovations, like “buy now, pay later,” to make flights as cheap as taking an Uber.

Pandemic launch
According to Axios, new low-cost airlines include:

• Breeze, which has one-way flights to L.A. and Vegas for $99, requires customers to book flights solely through an app and only allows people to talk to representatives through a messaging service.
• Avelo has flights as low as $29 and has service to marquee destinations like Nashville, Chicago, and Myrtle Beach.
• PLAY, an Icelandic airline, offers cheap flights to Europe from a few cities within the U.S. with a stop in Reykjavik — a classic strategy to increase tourism in the country.

Pilot programs
How do these airlines offer such cheap trips? Adam Gordon, managing director and partner at Boston Consulting Group, explains that the new kids on the block have higher tech planes that don’t require much maintenance, have lower labor rates (like a startup), and keep their business model simple (like Breeze’s messaging feature).

As these budget airlines mature (like JetBlue disrupting the industry in 2000 with seatback screens and free WiFi), these airlines will one day need to raise prices… leaving room for a new crew of upstarts.