PayPal : Reliable Service, Lower Fares in Underserved Communities Helps Put Avelo Airlines on the Map

Reliable Service, Lower Fares in Underserved Communities Helps Put Avelo Airlines on the Map

The airline industry has faced its fair share of challenges but one carrier is aiming to stand out by focusing on the biggest challenges facing its customers.

Avelo, a domestic discount airline flying to more than 50 destinations, developed its business strategy around major consumer pain points - long delays and cancellations, costly fees, and limited access to airports.

The company has strategically developed routes to service smaller airports, but they also fly to popular destinations like Orlando and Puerto Rico. Their low-priced fares are about $100 on average.

In the nearly three years it has been in operation, Avelo has delivered impressive results. In 2023, Avelo ranked second best for on-time performance and ranked first in their flight cancellation rate.

The company also prides itself on never charging customers an extra fee for canceling or switching their flights.

"The purpose of our airline is to inspire travel," said Hunter Keay, Chief Financial Officer at Avelo Airlines. "Travelers see a good value proposition with an airline they can rely on and with a fare they can afford. This means they may be inspired to visit friends or relatives they haven't seen for a long time or take their family to places they previously only dreamed about."

Hunter joined the company in 2022 after working as an airline research analyst for nearly 20 years on Wall Street. He said he joined because he believed in the leadership steering the company and their vision to create a no-nonsense, reliable airline.

"My experience has given me an excellent understanding for what works in the airline industry and what doesn't work," he said. "I've learned the value of a good balance between having a strong financial performance and having a product that is simple and reliable. Showing up on time, not losing bags, not canceling flights - those are table stakes, especially for a new airline trying to get new customers."

New customers keep rolling in, also thanks in part to word-of-mouth, which Hunter said accounts for about 60% of their business. In fact, their Net Promoter Score, (a marketing metric based on a survey asking respondents if they would recommend the company to others) stands at 50, which is remarkably high in the airline industry, he said.

Payment solution 'above and beyond' expectations

Part of their strong consumer-centric strategy has involved offering payment methods that are convenient, secure, and flexible. Another part of their strategy has also included having an efficient and effective integration of payment platforms on the backend to ensure a seamless process for both the company and the customer.

Hunter looked to PayPal for a complete solution. With PayPal Braintree, the airline is able to offer customers a choice in how to pay for their flight. On the backend, Braintree gives the company a single point of integration, regardless of how the customers pay, making it incredibly easy to manage.

"The PayPal Braintree integration was our single biggest IT success story that we've ever had at this company in my opinion," he said. "Not just through the speed but through the partnership and through the collaboration and the transition. This was a big project and if it had gone wrong, it would have created significant issues for our customers."

"We talked to a lot of emerging fintech companies who provided compelling economics and value propositions," he continued. "PayPal was the only one that delivered from a top to bottom perspective - from economics to support and collaboration - it was just the cream of the crop."

He said having access to PayPal's backend analytics has allowed Avelo to have a better understanding of its customer base and has provided more opportunities to resolve issues with customers directly. He also said that advanced fraud protection has helped to minimize chargebacks and helped increase overall conversion rates.

Through PayPal, the company also offers customers a Pay in 4 solution. Since implementing the payment option, they have seen a 50% higher Average Order Value than they would typically see from consumers using a credit card, Hunter said.

"It's delivering above and beyond our expectations," he added.

Plans for service expansion

With a successful strategy and satisfied customers behind them, Avelo is planning for a bright future by looking into expanding the current offering.

"We've got a lot of opportunity on our plate now," said Hunter.

Among those opportunities are adding 10 to 15 cities on their destination list over the next six months or so. They will also explore short-haul international flights.

"We're going to continue to grow over the next few years but we are going to grow in a way that is financially responsible," he said. "We're going to be nimble and explore opportunities that present themselves

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