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.
Now he’s got a new pitch to investors: that now is the perfect time to start a new airline, because used 747s for domestic routes can be acquired cheap, and look at all those furloughed employees!
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.” They didn’t get the money, but Michaels hopes that investors will bite once again.
Here’s their new pitch,
“An industry devastated by COVID-19 opens a door for those with the vision and fortitude to move forward with a new and better airline, one free of debt and well capitalized, and offering highly competitive hauling rates and passenger fares,” said Barry Michaels, founder and chief executive officer of Avatar, a different kind of airline based in South Florida with an optimistic view of the future of domestic air travel. “As other carriers are grounding more of their planes and laying off highly talented, experienced workers, it’s a tremendous opportunity for us to build a new airline that won’t be burdened by restructuring costs and mountains of debt.”
If you’ve got 30 minutes to kill
while trainspotting here’s an interview with one of their executives.
At the beginning of the year CEOMichaels claimed to be buying 30 Boeing 747s from Boeing and raising $300 million. Now it’s back to the used market.
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:
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.
Ironically Avatar’s founder pitches investors on his 30 year idea that’s never launched by asking, “Why put new investment dollars into old deals and ideas?”