An Airline That Doesn’t Actually Exist Applied For $15 Million Airline Bailout

Avatar Airlines applied for $15 million in CARES Act funding seeking a portion of the federal airline bailout – even though by their own admission they “have no flights, no overhead, administrative expense, or fixed costs at the present time.”

Barry Michaels has been trying to start an airline for at least 28 years. First under the name Family Airlines, and then Avatar Airlines, he’s had an idea to fly Boeing 747s between leisure destinations. He went to prison for tax and securities fraud raising money for the venture. The DOT insisted he give up control of the project.

He’s kept trying, and kept failing, for three decades. Two months ago he claimed to be buying 30 Boeing 747s and raising $300 million. That plan hasn’t gone anywhere. But where do you get when you need money? The same place all the other airlines do!

If Avatar ever gets money – and uses that money to start an airline – the plan they laid out would be to build their 747 route network:

avatar airlines route map

Michaels wants to squeeze 581 passengers into a 747 in order to produce low seat costs. That’s great if you can fill the plane, but an empty 747 has very high per passenger costs. First flight of the morning on Tuesday and Wednesday from Los Angeles to Las Vegas, and Saturday early morning Vegas to Albuquerque aren’t likely to be winners.

Avatar has an answer to that though…. advertising! They plan to make a profit painting planes in Coca Cola, Burger King, and Red Bull branded livery. The overhead bins will advertise men’s grooming.

Aside from the notion that a bailout for an airline that hasn’t raised money (and that’s committed crimes when it tried) is on its face absurd, it appears they didn’t even fill out the correct form.

(HT: @IshrionA)

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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  1. Nancy should cut Michaels a check, like she did for the Kennedy Center. That way Barry could save American jobs, like the Kennedy Center did with all their layoffs and furloughs.

  2. AlohaDave – if you haven’t noticed, Trump is President, and is responsible. Oh that’s right- “I take no responsibility at all” – what a loser!

  3. I’m surprised that the big banks didn’t push him to the front of the line so they could have even gotten more money for generating loans. This is starting to look like a story line from the Soprano’s.

  4. Why should we be surprised, as it appears blatant fraud is a way of life in America, as if it were some under-developed country. We have to deal with on a daily basis:

    -Blatant Medicare fraud committed on a serial basis by physicians in neighborhood settings under the radar of the so called omnipresent Medicare fraud&abuse investigators.
    -Excessive profiteering by pharmaceutical firms that ensure their monopoly position, despite the U.S. as a world model of competition; overcharging in the U.S., while profits limited everywhere else; creating litigation to stifle generics; falsely changing drug formularies to extend life of brand patent.
    -How Amtrak willfully overcharges states for their corridor operations in order to subsidize the high cost of ownership of the Northeast Corridor. In essence, intra-state rail services, as in California, would operate either profitably, or close to being profitable, were it not for Amtrak’s manipulated full cost accounting formula.
    -Airlines holding out their tin cup, despite airports built with muni bonds; selling take-off slots in capacity controlled airports as if they owned them.
    -Where is Congress in their rush to feather the airlines not to require that all code-sharing with foreign carriers refund in cash all tickets; not vouchers, in order for the U.S. carrier to be subsidized by the taxpayer. As well, to withdrawal landing rights of foreign carriers who insist on stiffing U.S. passengers with vouchers in lieu of cash.

    Those involved with Avatar, directly, silent partners, etc. should be banned from investing or owning anything in aviation larger than a baggage cart.

  5. @Mark, well said. The airlines spent $46 Billion in the past few years buying back stock to line the executives pocket instead of saving for something like this. Unions demanding and getting huge wages for unskilled labor. But why not? The government always bails them out. They should have let them go in to Chapter 7 or 11. The airlines, Boeing, Etc. will not disappear. Someone will come along and pick up the skeleton and make it work.

  6. @ Gary. Is this the same person that set up shop next to Robert Mueller Airport in the early 80’s? I can’t remember the name of the “airline” (something like Austin Express or Texas Express) but evidently a conman as he passed himself off as a highly decorated Marine Corps officer. . . which seemed rather odd when I read that since he was very young.

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