Avelo launched service at the end of April with an aggressive focus on Burbank. The initial 11 cities have now been flying at full strength for long enough that I thought it was time to check in and see how they were doing. At first blush, it appears that some markets are doing better than others, though we have no way of knowing if they’re actually doing “well” or not. Some markets clearly are suffering, with the most frequent markets doing the worst… and they won’t be as frequent anymore.
For this exercise, I had to do some manual hunting and pecking. I went to the Avelo website and pulled up the selling fare on all departures from Burbank, sorted by destination. I didn’t bother looking at return fares to Burbank since departures would give me enough information. It’s not a perfect metric either way, so I opted for simplicity.
This is far from scientific since the airline could — as unlikely as it may be– have different revenue management strategies for different destinations that are masked when using this crude method of scanning the website. But just because it isn’t perfect doesn’t mean we shouldn’t look at the information that’s available. Based on this info, I’d lump the routes into three categories.
How do I get to this conclusion? Again, it’s based on lowest selling fare for each flight in July along with some other observations about frequency changes. It may not be perfect, but it still seems to be rather telling. Let’s start with the most interesting routes, the red ones that seem to be struggling the most.
For all of these charts, I took the lowest selling fare on the dates that a flight operates in a market. Then I did a distribution showing what percent of fares in each market fall under each pricepoint for the month of July. Fares ranged from $39 to $129 with the highest fares being around the upcoming 4th of July weekend, as you would expect. Here is the spread for the four weakest fare markets.
July 2021 Selling Fare Percentage by Flight – Weaker Performers
Phoenix/Mesa looks to be an absolutely awful performer here. Yes, Avelo has moved off its intro $19 fares in all markets, but the bland email marketing message I got on Tuesday — they come like clockwork Tuesday and Thursday whether useful or not — says sale fares are starting at $49. Apparently Phoenix/Mesa is so bad that fares actually start even lower than the published sale.
If that’s not bad enough, this was one of the markets that was supposed to operate every day, but that is no longer the case. After early July, it drops Tuesday/Wednesday/Saturday flying so it will now operate only 4x weekly. All that competition into Phoenix/Sky Harbor is certainly suppressing fares, and so frequencies are getting cut.
Next up on the list is the airline’s inaugural route to Santa Rosa. They were high on this market, and yes, the fares are much better than Phoenix/Mesa. But again, after early July, flights have been pulled on Tuesday/Wednesday/Saturday so it will also only operate 4x weekly. Alaska is in the market, but it maintains higher fares than the competition in the Phoenix bloodbath. Still, the off-peak days have not filled up enough to survive.
The last of the frequency losers is Ogden which was operating 6x weekly. It has done a little better on fares with more higher-fare dates than the other two, but it will, with rare exception, now not fly on Tuesdays and Wednesdays in addition to Sundays when it already wasn’t going to fly.
I have also lumped Medford into this group despite it not losing frequency. It probably helps that Medford was already operating only 4x weekly. Still, its fares tend to skew lower than other markets, even if it has some flashes of success.
I reached out to Avelo asking for comment on whether the frequency reductions were operational or commercial, and they snuck a response in just before the deadline. Jim Olson, Head of Communications for Avelo, said this:
Heading into the holiday weekend our load factors are the highest to date and we are very encouraged by the close-in booking trend we are observing as the peak summer travel season hits its stride. Our load factors continue to climb as awareness builds.
Like all airlines, we are going to be continuously adjusting our schedule – adding and removing capacity to match demand and seasonal shifts. We expect to reallocate some of this capacity with new service this fall.
That is some expert word-torturing there, but in short, it’s not an operational problem. This is a commercial move.
Now, let’s move on to the decent performers.
July 2021 Selling Fare Percentage by Flight – Mid-Range Performers
You can see on this chart that the bulk of fares are in the middle of the range. Bozeman has a Sunday problem which in theory should be ok, because while nobody is going to Bozeman on Sunday, loads of people should be coming home. Looking at Bozeman Sunday departures, however, we see $49, $59, $59, and $69 in July, so that’s not encouraging either.
The others seem to be getting higher fares, but then again, markets like these tend to be less competitive. than a Phoenix or Santa Rosa. So it’s really hard to place these exactly.
Now, let’s move on to the winners.
July 2021 Selling Fare Percentage by Flight – Best Performers
Who would have thought that the fares would appear to be highest in the triumvirate of Arcata/Eureka, Bend/Redmond, and Pasco?
Just to get another datapoint, I looked at today’s flight to Pasco yesterday morning and saw only 15 seats still available on the seat map. The Bend flight had 21. (Arcata/Eureka doesn’t operate today, so seats hadn’t been allocated yet for those who didn’t pre-purchase them.) Ogden, meanwhile, has 64 open and Phoenix/Mesa has 119. That seems to sum it up quite nicely.
It’s hard to me to say whether Arcata/Eureka, Bend, and Pasco are doing well. They just appear to be doing better than the rest considering the relative pricing strength. At the very least, it seems that Avelo has an off-peak problem and more changes will be coming as it struggles to find its place.