The US economy already looks like it's in a recession, according to Danielle DiMartino Booth.
The chief strategist of QI Research pointed to weakness in the job market, with layoffs rising.
She said that puts the economy in a precarious state, especially with US debt-taking already looking similar to China's.
The US economy is already in a downturn — and it could be following in the footsteps of China as the government assumes a growing amount of debt to prop up growth, according to veteran forecaster Danielle DiMartino Booth.
The chief strategist of QI Research has warned for months that the US economy is already in a recession, despite Wall Street's upbeat outlook for a soft-landing. But a downturn is already evident in the weakening job market, Booth said, pointing recent downward revisions in monthly job growth figures.
The job market remains on solid footing by historical standards. The economy added a more-than-expected 303,000 jobs in March, while the unemployment rate remained near a record-low.
But new payrolls were revised slightly lower for the month of February, falling to just 270,000. Meanwhile, layoffs and unemployment have inched higher in recent months, with total discharges rising to 1.7 million in February, according to the Bureau of Labor Statistics.
"These revisions, they keep pushing us back further and further from where we thought we were," Booth said in a recent interview with Fox Business. "It seems like every time companies report their earnings, they're doing it with a kicker that says hey, we're going to lay off 2,000 people or 1,500 people or whatever it is."
Other economists also foresee a weaker labor market, which raises the risk of a recession. The economy could enter a hard-landing by the end of the year, causing the unemployment rate could surge to 5%, top economist David Rosenberg recently predicted.
The economy is already in a rocky position, especially when considering ballooning US debt levels, Booth added. Government debt-taking makes the US economy look precariously similar to China's, she said, where state-owned enterprises once accounted for as much as 60% of the nation's GDP, according to a 2019 estimate from FactSet.
"It is not different in any way shape or form," Booth said on the similarities between America's and China's economies. "Right now the public sector is sucking the life out of the private sector … We have to spend less as a country to let the private sector really come out and drive the economy."
The federal debt balance is at all-high of $34.5 trillion, according to Treasury Department data. Ballooning debt levels could eventually spark an array of problems for the economy, experts have warned, including higher inflation, greater market volatility, and a lower quality of life for Americans.
The median compensation for associates was $27,642, according to Walmart's annual proxy statement.
Since 2009, McMillon has received a combined $136 million for his work as a Walmart executive.
The CEO of the world's largest company just had another very good year.
Walmart's Doug McMillon received total compensation last year of more than $26.9 million, up $1.6 million from the year before, according to the company's annual proxy statement filed Thursday with the SEC.
The pay package consisted of $1.5 million in base salary, $19.6 million in stock awards, and $5.8 million in other compensation.
It's a sizable increase from his first wage job unloading trucks for the retailer earning $6.50 an hour in 1984, which would be about $19.79 in today's dollars.
The 57-year-old Arkansas native is now in charge of 2.1 million workers across more than 10,000 retail stores around the globe, and annual sales of $648 billion — that's more people and higher sales than any other private employer in the world.
Of those 2 million-plus workers, the median employee was paid $27,642 last year, up 1.8 percent from last year. McMillon's compensation is 976 times that amount.
Under a new calculation that companies are required to disclose as of last year, McMillon saw his net worth grow by nearly $47.5 million last year after adjustments to recognize the fair value of his stock awards.
Since 2009, Walmart has paid McMillon a combined total of nearly $163 million for his work as an executive. Prior to becoming CEO, McMillon was in charge of the corporation's international division from 2009 to 2014, and head of Sam's Club from 2005 to 2009.
Do you work at Walmart? Contact Dominick Reuter via email or text/call/Signal at 646-768-4750. Responses will be kept confidential, and Business Insider strongly recommends using a personal email and a non-work device when reaching out.
Mohamed El-Erian named three key risks that will determine where US growth is headed in 2024 through 2025.
That includes changes to the Fed's inflation target and low-income consumer spending.
Investors will also watch for a balance between technological innovation and geopolitical tension.
If Wall Street was wrong about recession odds in 2023 and 2024, forecasting for next year won't be any easier, Cambridge economist Mohamed El-Erian wrote in Project Syndicate.
In his view, chances of a US soft-landing scenario still remain strong for the near-term, but there are three key risks that will determine how likely this really is.
First, all eyes are on the Federal Reserve as to whether it will double down in its 2% inflation chase, or if it can live with a slightly higher rate.
According to El-Erian, the central bank's fixation on this figure could trap it between a rock and a hard place, in the case that US growth starts slowing before the target is reached.
In fact, the first quarter is already showing signs of this, with the latest GDP reading declining markedly against hotter-than-expected inflation. That has led to "stagflationary" alarm on Wall Street, a situation the Fed could only combat by hiking interest rates higher.
Since last year, El-Erian has warned 2024's inflation would get stuck between the 3%-4% mark, and called on the Fed to readjust its target a percentage higher; otherwise, the central bank risks crushing the economy to achieve its goal, he's said before.
Second, America's growth trajectory will also depend on consumer spending, but especially among lower-income households. Though US consumption has generally stayed strong, lower-income brackets have taken the brunt of a declining environment. The cohort is increasingly strained by higher debt and eroded savings.
"Given high interest rates and some creditors' loss of enthusiasm, this cohort's willingness to consume will hinge on whether the labor market remains tight," El-Erian wrote.
Third, US growth is at the mercy of where the broader narrative goes — which could either mean an innovative boost or a international rupture:
"While technological advances promise a new favorable supply shock that could unlock higher growth and drive down inflation, geopolitical developments could do the opposite, as well as limit the scope for macroeconomic policy," he said.
For instance, while technology such as generative AI and sustainable energy could mean transformative growth for at least a few years, international strife could spark stagflationary instability — such as in the case that crude surges over $100 a barrel, El-Erian wrote.
According to the Washington Post, the former president is annoyed by Lake's frequent jaunts to Mar-a-Lago, Trump's resort and political home base in Palm Beach, Florida.
At one point, according to the report, Trump even "gently suggested to Lake that she should leave the club and hit the campaign trail" in Arizona, where she's set to face Democratic Rep. Ruben Gallego in a high-stakes Senate race this fall.
While not the most important Senate race this cycle — Republicans have generally focused more on unseating incumbent Democratic senators in Ohio and Montana — Lake's race still matters. If she's able to make the race more competitive, it increases Republicans' chances of retaking the chamber, which could make or break Trump's ability to govern if he wins a second term.
Spokespeople for Trump and Lake did not immediately respond to Business Insider's request for comment. A Trump spokesman did not directly address the Post's reporting, but told the outlet that Lake is a "Smart and Fearless Leader who will WIN in Arizona." A senior advisor to Lake told the Post that the Senate candidate is "running a strong campaign."
Yet Lake has traveled out of state numerous times for speaking engagements and campaign events in the midst of her current campaign. On a semi-regular basis, the Arizona Democratic Party has sent out newsletters entitled "Where In The World Is Kari Lake?" highlighting the candidate's latest travel.
During one recent appearance before a Republican crowd in Idaho, Lake even appeared to backtrack on her stated opposition to Arizona's newly instated abortion law, saying that "unfortunately" it was not being enforced.
George Santos as he leaves the Alfonse M. D'Amato United States Federal court house after his appearance in Central Islip, New York, on October 27, 2023.
Newsday/Getty Images
George Santos will be making Cameo videos as his drag persona, Kitara Ravache, he said.
Santos previously denied having been a drag queen despite evidence of him dressed in drag.
After being expelled from Congress, Santos has used Cameo to earn money.
Santos, who was expelled from the House in December after a brief scandal-ridden stint representing New York's third district, said in an X post that he would be offering personalized Cameo videos as his drag persona.
Y'all weren't ready for this drop?
I've decided to bring Kitara out of the closet after 18 years!🤣🤣🤣
According to Kitara Ravache's Cameo page, 20% of the money earned from the videos, which cost $350 each, would go to charitable causes.
In a message to "you messy bitches," Santos said 10% of the money would support Tunnel to Towers, which helps the families of 9/11 victims, while another 10% would go to the pro-Israel philanthropic organization, the International Fellowship of Christians and Jews.
"It's going to be super limited to a couple of days," he said in a video on the page.
While Santos was still in Congress, images of him dressed in drag emerged. He eventually confirmed the authenticity of the photos but denied having performed as a drag queen.
Santos told reporters at the time: "I was young and I had fun at a festival."
However, claims from Eula Rochard, a drag performer from Brazil, appeared to contradict this.
Rochard said that she had known Santos as a drag queen and that he'd competed in drag in a beauty pageant as Kitara Ravache in 2008.
Additionally, a series of videos suggested that Santos had dressed as his drag persona over a period of at least three years, casting doubt on his claim that it was a one-off occurrence.
Several states, such as Montana, Texas, and Florida, have attempted to enact legislation prohibiting drag shows in certain public venues, with varying levels of success.
His political career has been marred by controversy, starting with reports emerging while he was a Congressman-elect, accusing Santos of fabricating aspects of his life story and details of his résumé.
He's also been facing legal troubles, having pleaded not guilty to 23 fraud-related charges. He is accused of identity theft, stealing donors' credit card details, and lying to the FEC, and is awaiting trial.
Following his expulsion from Congress, Santos turned to Cameo as a source of income.
A Russian energy facility after a drone attack in Smolensk, Russia, in a still from a video released April 24, 2024.
Social Media/Reuters
Ukraine continues to target Russian energy facilities despite reported White House objections.
The attacks are an attempt to weaken Russia's economy, straining its primary foreign currency source.
Strategists argue that consistent pressure on Russia's energy sector could have a long-term impact.
Four days after the US voted to sign off a long-awaited $61 billion in aid, Ukraine did the one thing that the White House has reportedly been asking it not to do: It struck another oil facility on Russian soil.
These are just the latest in a ferocious string of attacks on Russian energy facilities, launched by Ukraine since the start of the year.
Ukraine's rationale for hitting Russia's energy infrastructure came in response to the muted impact of Western sanctions, as well as delays in Western aid as it struggled to hold the front line.
Ukraine needed to be "more creative, or think in more 3D terms about the battle space," Ann Marie Dailey, a geopolitical strategist at the RAND Corporation, told BI.
"You need to find other ways to weaken your opponent and stretch their resources," she added.
While the US dithered over aid, Ukraine had a robust argument for prosecuting the war pretty much as it pleased.
But now that the aid bill has passed, "there's a bit more political leverage on the side of the US," Rafael Loss, a policy fellow at the European Council on Foreign Relations, told BI.
Reports suggest that President Joe Biden's administration has tried to dissuade Ukraine from attacks on energy infrastructure. (Ukraine has denied this, while the White House has not commented directly.)
Reported concerns from the US include the impact on global oil prices, and the risk of a Russian escalation in the war, The Washington Post reported.
The debate over the attacks has also exposed fault lines in the relationship between Ukraine and its most powerful ally.
"It is a risky move to continue that,"said Marina Miron, a post-doctoral researcher at the Department of War Studies at King's College London.
Defying a powerful ally
Ukraine risks alienating its most powerful ally by going against the US just days after Congress approved a hefty military aid package.
But, as multiple analysts have said, the aid package alone isn't going to win the war. Ukraine needs ways of weakening Russia, and that includes striking its energy infrastructure, Dailey said.
She likened the situation to a boxing match in which one fighter is only allowed to hit the other's arms.
And Russia has been landing body blows. On Saturday, Russia unleashed a massive attack on Ukraine's energy facilities, Ukrainian President Volodymyr Zelenskyy said.
Russia has previously said that attacks like these are a direct response to Ukraine's own attacks, according to the Post, a stance that, on the surface at least, seems to validate US fears.
Even so, Ukraine has a point to prove about its own agency in the war, Olga Tokariuk, an academy fellow at London's Chatham House, told BI.
Russia has repeatedly tried to paint the conflict as a proxy battle between itself and the US, diminishing Ukraine's role, she said.
By ignoring the White House on key issues of military strategy, Zelenskyy can demonstrate that Ukrainians "have their own agency, they have functioning democratic institutions, even amid war, and they're able to make their own decisions," Tokariuk added.
And, as some analysts have noted, the political situation in the US — with former President Donald Trump vying to regain the presidency — could mean that this is the last aid package Ukraine gets from the US.
This "somehow frees them to actually keep on conducting those strikes," Miron said.
Whittling away at Russia's war economy
Ukraine's attacks are taking place hundreds of miles behind enemy lines, far from the home territory it is trying to defend.
Part of the US' unease, Pentagon official Celeste Wallander told a House panel earlier this month, rests on the fact that energy infrastructure is a civilian target and not a military one, as the Post reported.
Defense Secretary Lloyd Austin previously said that the US would prefer that Ukraine target Russian airfields, the outlet reported.
But there is also the question of how effective the attacks are in military terms. As Carnegie scholar Sergey Vakulenko wrote recently, even if Ukraine took out every oil and gas facility within reach, Russia would likely still have enough for its own uses.
"Taking out a particular refinery is not going to immediately undermine Russia's war effort," said Dailey, the RAND strategist. "But consistently putting pressure on Russia's oil sector would have a significant impact on Russia's ability to fight this war."
She said that, in the long term, lower oil output would cut into Russia's access to export earnings — vital foreign currency it uses to buy materials it needs for advanced weaponry.
Vakulenko, in his article, also noted that that strikes on Russian oil refineries have "little impact on Russian export earnings."
But, he said, if Ukraine keeps up the same pace of attacks it set in March, it "will be able to keep damaging Russian refineries faster than they can be fixed, slowly but steadily eroding the country's refining capacity."
In February, Russia announced a six-month gasoline export ban. Later, Ukraine said that its attacks had reduced Russian oil production and processing by 12%. The attacks have some other indirect military benefits, experts told BI.
They likely create headaches for Russia's air defenses, given the size of the country and the amount of air space it has to worry about, Loss said.
There's also the political impact, Tokariuk added.
One of the reasons Russians support the war is the sense that it is a distant conflict — but incoming attacks on home soil give "a sense that the war is near," she said.
No sign of a pause
There's every sign that attacks like this will increase even after the influx of military aid, Britain's defense chief Admiral Sir Tony Radakin told the Financial Times last week.
Some experts BI talked to agree.
"I would expect at least some strikes deep behind Russian lines" to continue after the aid package arrives, said Loss.
He added that with sanctions on Russia still failing to really bite, "the urgency of the situation" means that Ukraine is right to try to hurt Russia's economy in other ways.
Loss also pointed out that despite the Biden administration's reported concerns, there's no sense that the US has actually withheld intelligence or otherwise tried to stop the attacks from happening.
James Patton Rogers, executive director of Cornell Brooks Tech Policy Institute, told BI that "the reports of US concerns about these strikes are often exaggerated."
The Biden administration's statements are a reflection of a standard NATO position on the matter, and "not because they expect Ukraine to stop," he said.
Patton Rogers also pointed to their impact on Ukrainian morale.
"They are publicly popular at a time when morale is low and Ukraine outgunned," he said. "When faced with delayed funds, shortfalls in munitions, and the relentless Russian bombing of urban centers, what else does the US expect Ukraine to do?"
Justin Sullivan via Getty Images; Abdulhamid Hosbas/Anadolu Agency via Getty Images, Chelsea Jia Feng/BI
AI might ultimately take all our jobs. But right now, it's minting plenty of high-paying roles.
Eager to understand how to leverage the tech, companies are racing to scoop up AI specialists.
The fight for talent has tech companies pulling out all the stops. That includes calls from high-profile CEOs and seven-figure pay packages, writes Kali Hays and Ellen Thomas.
But Big Tech companies aren't just competing with each other. Wall Street is throwing big money at AI specialists. Banks, hedge funds, and private equity are all getting in on the fun.
And then there are startups. But it's not just about joining a young company. With so many venture capitalists eager to fund AI ideas, some AI talent are starting their own companies.
Westend61/Getty, Berkah/Getty, Sean Gladwell/Getty, Olga Pyrkina/Getty, mbbirdy/Getty, Tyler Le/BI
The AI hiring frenzy comes during a massive spending spree in the space.
The dynamic puts incredible pressure on the AI talent being brought in. With shareholders keen on these AI investments to payoff, companies will be expected to find revenue streams quickly.
It's gonna take some carnage to get rate cuts. Black Swan investor Mark Spitznagel said the Federal Reserve will only consider lowering interest rates when a recession is imminent or the stock market is crashing. "Be careful what you wish for," Spitznagel told Reuters.
The AI-fueled stock market bubble has a few years left. Research firm Capital Economics said 2026 is when things will come crashing down for AI. It has a glum prediction for the markets, anticipating returns from equities will be weaker over the next decade than the previous one.
David Einhorn has a theory about why gold prices have spiked. In his latest letter to investors, published this week, the Greenlight Capital founder said there's been a "secular trend" of countries from the East buying the precious metal from Western nations.
Bill Gates never left. Since 2021, Gates has largely been out of the picture at Microsoft — at least publicly. Current and former executives told BI Gates stayed intimately involved in the company's operations. While CEO Satya Nadella might be the face of Microsoft's AI success, insiders say Gates has been the one quietly pulling the strings.
No For You Page, no problem. The ink has dried on the "TikTok ban" bill, and many are concerned about the app's future. Selling TikTok without its infamous algorithm seems like an inevitable doom for a new owner. But what if it's not?
Shopify is back. The e-commerce giant's stock surged 200% in the 18 months after October 2022. Analysts credit Shopify's rebound to several well-timed decisions, including selling off a money-losing business and making two big cuts to its head count.
3 things in business
A tale of two Gen Zs in America. There are young people who have followed traditional milestones in life and then there are those who are getting left behind. Meet the "disconnected youth" — they want education and a good job, but circumstances outside of their control are getting in the way. And that might cost them.
The sudden demise of ComplYant. A tax-compliance startup abruptly closed its doors in September, despite raising over $10 million in venture funding. It took employees two months to receive their final paycheck. Then the CEO cut off all contact
Guys literally only want one thing… a $7,000 chair. The Herman Miller Eames lounge chair and ottoman has become a status symbol for a certain type of young, newly rich American man. BI set out to find out why finance and tech guys are treating a chair like it's a Rolex or a Porsche.
Helicopter chartering company Blade is widening its reach to include luxury bus journeys.
Blade
Blade is launching a new luxury bus service between NYC and the Hamptons.
Prices start at $195 for a single trip.
Blade says the bus journey will have the same level of service as a private flight.
Helicopter chartering company Blade is launching a new luxury bus service between New York City and the Hamptons to bridge the gap between cheap bus journeys and its pricey helicopter flights.
Part of the appeal of its helicopter service is its nearly 40-minute journey time, which costs around $1,050.
But while the company's luxury bus still has to obey traffic rules, it aims to offer guests a more premium experience to distract them from the longer journey time.
It will be like an in-flight service than a traditional bus. Passengers will be able to press a call button to have staff bring them complimentary refreshments, including espresso martinis and Sweetgreen salads, as well as hot towels and cashmere blankets, The New York Times reported.
"This level of service is commensurate to what you would see in private aviation," Roisin Branch, Blade's chief marketing officer, told the outlet.
It comes at a price, though: the cheapest one-way seats start at $195 for the double-row seat and go up to $275 for a single-row seat, Bloomberg reported.
The 19-seat buses are a partnership between Blade and The Jet, a luxury coach company. The Jet also runs a service between New York City and Washington, DC which promises a similarly high level of service as the latest collaboration — including comfortable seats, extra legroom, and high-quality WiFi.
Blade aims to capture the market of people who don't want to charter a helicopter but are happy to pay more than the mainstream bus fare. The popular Hampton Jitney bus costs around $40 when booked ahead of time.
The new luxury bus service promises fewer stops and only picks up New Yorkers going to the Hamptons in Hudson Yards — one of the city's most expensive neighborhoods.
In 2022, Blade had to bump up the price of its helicopter trips to the East Hamptons after new airport regulations limited the company to one trip a day, Blade CEO Rob Wiesenthal previously told BI. The regulations were made in response to thousands of complaints from local residents over the noise pollution from helicopters.
The company — whose early investors included former Google CEO Eric Schmidt, Warner Brothers CEO David Zaslav, and IAC chairman Barry Diller — has staved off competition in the field. It reported $225 million in revenue in 2023; over 50% of that was earned from the medical side of its business, which air transports human organs for transplant.
Meta's Oversight Board is preparing to make layoffs.
Josh Edelson/AFP via Getty Images
Meta's "supreme court," the Oversight Board, is planning to make some layoffs.
The body last week told some employees their jobs were at risk, The Washington Post reported.
The cuts come as platforms face mounting pressure to combat AI content before elections this year.
Meta's Oversight Board is preparing to make some job cuts, according to a report by The Washington Post.
Last week, the body dubbed Meta's "supreme court" told some employees their jobs were at risk, per an unnamed source quoted by the newspaper.
The cuts are expected to affect staff who support the 22 experts, such as academics and lawyers, who make decisions about content moderation on Facebook, Instagram and Threads, according to the Post.
The Oversight Board, which operates independently from Meta, was first announced by Mark Zuckerberg in late 2018 and began operating in October 2020. It was initially funded by Meta with a $130 million grant and a further $120 million in 2022.
The Oversight Board Trust chair, Stephen Neal, confirmed it was making "targeted cuts" in a statement sent to Business Insider.
He said the reductions would allow the board "to further optimize our operations by prioritizing the most impactful aspects of our workthat are delivering results for millions of people who use Meta's platforms around the world."
Neal said Meta remained committed to the board's success, and the board was confident the company would continue to provide additional funding in the future.
"Looking forward, we will continue to take the hardest cases, keep holding Meta to account, while working to improve how people across the world experience Facebook, Instagram and Threads," he said.
A Meta representative told BI that the company "remains committed to the Oversight Board, which operates independently from the company, and continues to strongly support its work."
Meta said that it valued the board's perspective and planned to continue updating policies and practices in response to their feedback.
Although the Oversight Board operates independently from Meta, the layoffs could affect the company's ability to police misinformation on its platforms amid mounting concerns about the spread of misinformation as the US election approaches.
The Financial Times reported that regulators were already concerned that Meta's moderation did not go far enough to target political advertising that put electoral processes at risk.
Big Tech companies have been trying to show they are ready to combat new threats posed by the rise of AI-generated content and deepfakes. The wide range of widely accessible AI tools has led to a surge of fake visual content online, which many platforms are struggling to police.
Meta recently announced it will begin labeling a wider range of content with its "Made with AI" label after an Oversight Board recommendation.
The company said it will add the label to audio, video, or images when industry-standard AI image indicators are detected or when users identify the content they upload as AI-generated.
Avelo CEO Andrew Levy said the airline is chasing its first full year of profitability.
Avelo Airlines
Avelo Airlines continues to expand its fleet and routes, adding 10 new destinations on May 1.
The newcomer emphasizes reliability, low fares, and unique routes connecting smaller cities.
As Avelo strives for its third profitable quarter, the CEO says the airline is focused on itself.
When low-cost newcomer Avelo Airlines launched its first flight three years ago, it had just three Boeing 737 Next-Generation jetliners and served 11 West Coast destinations.
It's since grown to 52 airports coast-to-coast and 16 aircraft, with four more planes expected by the end of 2024.
The growing route map is helping Avelo rise in the ranks of US low-cost giants like Alaska Airlines as it chases its first full year of profitability after two high-earning quarters.
Business Insider spoke to Avelo CEO Andrew Levy about what makes the growing airline different from other low-costs and what customers can expect on board its planes.
New destinations and routes
Since the airline's first flight from Burbank, California, to Sonoma County in the state's northern wine country, it has expanded its network to 77 routes across 52 destinations, Avelo spokesperson Jim Olson said.
Over the next two months, Avelo will inaugurate 17 new routes connecting to new and existing destinations.
Sonoma County, for example, will see its destinations doubled when Avelo opens its sixth aircraft base on May 1, adding tiny markets like Boise Airport in Idaho and Glacier Park International Airport in Montana.
Avelo Airlines' route map.
Avelo Airlines
Among the 10 new destinations are Albany, Atlanta, Concord Airport near Charlotte, North Carolina, Destin, Houston Hobby, Knoxville, Lakeland in Central Florida, Miami, St. Louis, and Traverse City, Michigan.
Lakeland, which is just over an hour's drive to Orlando, will give travelers access to leisure hot spots like Walt Disney World or Universal Studios.
These additions align with Avelo's core network strategy: flying underserved nonstop routes to primarily secondary markets with little or no competition from other airlines.
"We still have the lowest cost structure in the US airline industry, and that is really because of how we've designed the company," Levy said. "We go to these secondary airports that are less expensive to operate in and out of."
For example, Avelo is the only airline serving New Haven, in southern Connecticut, giving nearby travelers more convenient options than driving to airports in New York City, Hartford, or Boston.
Reliability is 'in our DNA'
As an airline that launched in the middle of the pandemic, Avelo's CEO said it encountered countless challenges over the last three years that impacted travel, including increased oil prices, supply chain issues, and pilot shortages.
Throughout these struggles, Levy said the airline focused intensely on reliability, which was "top of mind" for everyone in the company.
"It's in our DNA," Levy said. "It's part of who we wanted to be when we launched the company, and it's part of who we are as we execute it."
Avelo finished 2023 as the No. 1 US carrier in cancellation rate and second for on-time performance, according to the market research firm Anuvu.
Avelo Airlines' second-place ranking for on-time performance is right behind Delta and just ahead of Alaska for 2023.
Avelo Airlines
That trend continued in the first quarter of 2024, with Avelo ranking second in both categories. That puts Avelo ahead of low-cost competitors like JetBlue Airways in both metrics.
Its cancellation rate is 0.13%, with low-cost giants like Spirit at 1.79% and Frontier at over two percent. These budget competitors, each with fleets more than 100-strong, have larger and more complex operations than Avelo.
No-frills planes and unbundled fares
Avelo Airlines doesn't offer any inflight entertainment on its flight.
Joe Scarnici
Avelo said it has the lowest cost structure in the US airline industry.
This is thanks to its out-and-back scheduling, direct distribution, and bare-bones aircraft structure, which means every add-on, like bags and snacks, comes at a fee.
The lighter seats and a-la-carte method mean Avelo doesn't have to pay for things it doesn't need, and neither does the customer — lowering costs and, therefore, ticket prices.
Avelo had the lowest average fare in the US airline industry last year, according to Avelo's assessment of other company reports shared with BI.
Its all-in average fare was $106, which is about $10 lower than the second lowest-fare airline, Frontier, and 53% lower than the US industry average of $227.
However, Levy said Avelo competes more with legacy carriers and Alaska rather than Spirit or Frontier, which go to larger airports with more competition than secondary markets.
But, in general, he said he's not worried about competition.
"I don't really pay any attention to these other airlines," Levy said. "We just focus on ourselves."
When it comes to baggage fees, though, Levy said he has "no doubt whatsoever" that some customers want to pay less.
Passengers have to pay $15 for priority boarding, between $11 and $64 for an advanced seat assignment with more legroom, $125 for a pet in the cabin, between $37 and $47 for checked bags, between $40 and $50 for a carry-on, and a $100 fee if the checked bag is over 50 lbs, according to Avelo.
"Everybody wants to pay less and get more," Levy said. "So, do some people wish that our bag fees were lower? I have no doubt that they do."