7th February 2020, Boeing gets a Letter Of Intention (LOI) for 30 new 747-8 aircraft, a deal that could be worth over $10 billion dollars, from Avatar Airlines.
Specifically, Avatar is interested in purchasing 30 new 747-8s (passenger-version) to be delivered within 3-5 years.
Avatar is currently looking to acquire 14 used 747-400s to begin their initial service, but the 747-8 is considered to be the ideal aircraft to replace the older 400s. Management also believes the -8 will provide an increase in passenger/freight load capacity; along with significantly lower operating costs, especially in fuel.
On 19th November 2019, Avatar filed for a 121 certificate with the FAA; also filing with the Department of Transportation for a Certificate of Public Convenience and Necessity.
Avatar’s plan is to operate ultra-low fare, non-stop flights to and from high-density markets within the continental U.S. Initially utilising a Boeing 747-400 aircraft configured with 581 seats, 539 Economy on the lower deck and 42 Business on the upper deck.
Their plan is a radical departure from the current “low cost” competitors that use small aircraft and charge passengers extras for various amenities, that used to be included in the cost of their tickets (i.e. seat selection, baggage, etc.).
Avatar plans to offer “all-inclusive” regular fares such as $49 from New York to Miami and $79 from California to New York; increasing markets for those that fly infrequently and creating new markets for those that don’t fly at all.
Avatar also plans to use the Boeing 747 to wholesale commercial cargo, which other low-cost competitors could not do due to the physical dimensions of their fleet. Potential profits will also come from advertising both inside and outside the cabin.
For its frequent flyer program, joining Avatar’s Fly “Free” Club requires a one-time registration fee of $49, plus $249 a year. You will get to fly “Free” on any available Avatar flight (just pay the applicable taxes). Think of it as flying stand-by without a charge.
Boeing and Avatar can reinvent the 747, with its lowest cost per available seat mile, into a gold standard for low-cost mass transportation, bringing increased value to their shareholders and the public.
Barry Michaels, Founder & CEO Avatar Airlines
Sound like an interesting plan? Do not get excited yet. Actually, this business model has been in the work since 1992, initially as Family Airlines.
Moreover, the founder, Barry Michaels, has been charged criminally and was sentenced to 21 months in prison, after pleading guilty to securities fraud and a tax charge in 1997.
It would be quite a surprise if this airline does actually take off.