Avelo Airlines has quickly left airports like McGhee Tyson. Will it stick in Knoxville?

Whenever an airline launches flights at a new airport, it takes a well-informed risk that a new city will supply enough passengers to fill its planes, which are increasingly a precarious resource.

Avelo Airlines is making the bet with McGhee Tyson Airport, but industry analysts say it could just as soon pack up for another airport if Knoxville doesn't meet passenger forecasts.

Though the budget airline was founded in 2021, it already has a history of doing just that.

Avelo has left airports similar to McGhee Tyson in a matter of months after disappointing passenger numbers, including Mobile International Airport, Melbourne Orlando International Airport and Dayton International Airport.

It's not the only budget airline to leave airports after a short stint. Frontier demonstrated an airline could survive leaving an airport after only a few months, and carriers like Breeze Airways have continued the practice, following better incentives in other markets.

One Avelo motto is "proof, not promise," said the airline's communications manager Courtney Goff, but its record is full of fast departures.

After less than a year of service to a handful of Florida airports from Blue Grass Airport in Lexington, Kentucky, Avelo announced it was suspending service in February 2023.

"We thought that there was enough demand there," Goff told Knox News. "Frankly, the demand was there, but not to the extent that we thought it would be, so we had to leave that market. And that's one of the reasons why we think Knoxville will work. There's not any nonstops to the state of Connecticut."

Avelo is starting small at McGhee Tyson with a twice-weekly flight from Knoxville to New Haven, Connecticut — home of Yale University, a distinct style of pizza, and a wealthy population with second homes and tourism bucket list items to cross off in East Tennessee.

If Knoxville meets the forecasted passenger demand, and if Connecticut residents make good on their apparent desire to see Great Smoky Mountains National Park and Dollywood, then Avelo may add more service to Knoxville's airport.

A new airline is good news for Knoxville, said William Swelbar, chief industry analyst at Swelbar-Zhong Consultancy. McGhee Tyson's mix of business and leisure travelers seems to be attracting attention from airlines, as has its record growth over the last year. In 2023, the airport served a record 2.81 million passengers.

"There was a point in time not that long ago when carriers wouldn't have experimented with new service," Swelbar told Knox News. "The fact that they are experimenting today points to the fact that Knoxville is showing up on the radar screens."

Avelo is not trying to encroach on Allegiant's dominance in flights from Knoxville to Florida, nor is it starting with daily flights. It will offer one-way temporary low fares of $62 to Tweed-New Haven Airport on Thursdays and Sundays beginning May 9.

The Avelo fleet has only 16 Boeing Next-Generation 737 jets to cover 47 destinations in 23 states and Puerto Rico, though it could add between four and eight more jets this year.

Tweed-New Haven Airport is a hub for Avelo, which focuses on short flights between small airports. The airline is able to offer low rates in part because it does not fly expensive cross-country trips, but keeps its West and East Coast networks separate.

In addition to affordability, Avelo has also made a name for its reliability. In 2023, a third-party data platform found Avelo had the lowest cancellation rate of any U.S. airline and the second highest rate of on-time flights.

Many Knoxville residents had never heard of Avelo when it became the sixth carrier to offer flights from Knoxville on Feb. 6, the first new airline since Frontier came in 2011.

Will Avelo make a name for itself here, or will it last long enough for travelers to remember its name?

Aviation leaders say there's no guarantee Avelo Airlines stays

Airlines look at a lot of data before adding a destination. In addition to the percentage of seats they can fill, airlines look at how many planes they have and how much it costs to lease them, as well as how much they must pay pilots to stay competitive.

Swelbar, a leading aviation analyst, knows the industry and airline CEOs. He said Andrew Levy, chairman and CEO of Avelo, follows the numbers closely. Levy is an industry veteran who co-founded Allegiant Air and was CFO at United before starting Avelo.

If the numbers don't add up for Avelo in Knoxville, there's no guarantee the airline will stay.

"In this air service world, there are no guarantees," Swelbar said. "The minute we think the industry stabilizes, there's a Boeing Max issue."

Though it doesn't fly Boeing 737 Max jets, Avelo's fleet is still destabilized by the years-long saga of safety concerns and Federal Aviation Administration investigations into the planes.

Avelo leases Next-Generation 737s from other companies, several of which are holding onto them more closely now that the Max series has proved so volatile, said Goff, the Avelo spokesperson.

Securing Avelo is a sign of health for McGhee Tyson, which also added a new service to Philadelphia on Frontier the day after the new airline announcement. Avelo is rapidly expanding, too. In 2023, the airline served 2.3 million passengers, an 85% increase over the year before.

As it added Knoxville to its destination list from New Haven, Avelo also added Atlanta, Concord-Padgett Regional Airport in North Carolina and Destin-Fort Walton Beach Airport in Florida.

Like other airports, McGhee Tyson has an FAA-approved incentive program to attract airlines, which can include guaranteed revenue and reduced or waived fees.

Budget airlines, also known as ultra low-cost carriers, can take advantage of these incentives when they hop from airport to airport, said Stephen Van Beek, director of Steer, a global transportation consultancy.

"(Ultra low-cost carriers) tend to be very opportunistic and they'll flip their schedules, they'll move their planes wherever they see a better opportunity," Van Beek said. "If you're not performing and another airport puts an incentive on the table where you think that's going to be a good market, you're likely to go there."

The task for McGhee Tyson and Avelo now is to prove they can make new air service work in Knoxville. And if they pull that off, other airlines will notice, Van Beek said.

"It's not just how Avelo thinks about how they're doing, it is also going to be observed by the other airlines to see what's happening with it," Van Beek said. "This could draw other potential airlines, if they see that it's working there."

Daniel Dassow is a growth and development reporter focused on technology and energy. Phone 423-637-0878. Email daniel.dassow@knoxnews.com.

Support strong local journalism by subscribing at knoxnews.com/subscribe.   

This article originally appeared on Knoxville News Sentinel: Will Avelo Airlines cancel service to Knoxville airport