Airlines around the world were phasing Boeing 747s out of their fleets even before the Covid-19 pandemic devastated the air travel marketplace.

But a nascent carrier called Avatar Airlines has centered its business model around the original jumbo jet. And its executives argue that the current crisis has made entry conditions especially ripe.

"Avatar is going in a whole different direction than the entire industry. We're not mad and we're certainly not crazy," chief legal officer Michael Zapin said during a recent webinar for potential investors.

If that sounds like an unusual approach to convincing people to part with their money, it's not nearly as out-of-the-box as the Avatar business concept itself. 

The company, founded by Barry Michaels, who has more than four decades of experience in various industries -- but none in airlines ­-- foresees packing 747-400s with 581 seats. That's more than 100 more seats than many configurations conventional carriers have flown.

Crowding, though, would have its perks. Avatar foresees selling flights at rock-bottom fares. For example, $19 one way for short hops. And don't worry about all those fees that discount carriers such as Frontier and Spirit charge. Avatar plans to include bags, seat selection and WiFi with standard fares.

So how exactly would the company bring in revenue?

Barry Michaels
Barry Michaels

Michaels and his team foresee turning their aircraft into giant billboards, both on the liveries and inside.

"Anything that you see or touch will be available for purchase," the company wrote in a November 2019 regulatory filing. "Management even envisions patrons using the restroom and being greeted by a named brand bathroom tissue company when they look inside the lid of the lavatory bowl."

Michaels said he also envisions leasing the bellies of Avatar 747s to cargo carriers -- a departure from the typical industry business model, where passenger carriers sell belly space and transport goods through their own cargo divisions. 

The Avatar concept, while definitely novel, isn't new for Michaels. He first applied for DOT approval in 2008 as Family Airlines. A dozen years later Avatar is still seeking its first investors.

Approximately 30 people sat in on an Avatar investor seminar on the morning of Dec. 8, one of three seminars the company planned in December as part of its attempt to raise initial capital of $5 million to $15 million. 

Michaels aspires to launch the carrier by early 2022, initially with a fleet of four 747s based on the two coasts. The pandemic, he said, has made that goal more feasible as additional carriers, such as British Airways, have shed their 747s. 

"The only competition is the trash heap," Michaels explained.

Avatar made a recent, but ultimately unsuccessful, entreaty to acquire recently retired BA 747s. It is also eyeing the 10 747s that Thai Airways has on sale. Thai is going through a bankruptcy, and Zapin explained that Avatar would offer an exchange of equity for the 747s. 

Indeed, demand for aftermarket 747s is so low that Richard Aboulafia, an aircraft industry analyst with Teal Group, said that owners will likely at least listen to any offer. At present, there are 121 retired 747 passenger jets and 23 retired 747 freighters available on the aftermarket. 

Still, Aboulafia is skeptical of the Avatar concept, noting that there are reasons airlines no longer want four-engine jumbo jets like the 747 and the Airbus A380.

"They are hard to fill and expensive to operate," he said. 

Former Spirit CEO Ben Baldanza, who oversaw that carrier's transformation into an ultralow-cost carrier, offers a hopeful view on Avatar's concept. 

"You put enough seats on the plane and charge the right prices, maybe you can get commodity demand," he said. "It is questionable, not impossible."

Baldanza, himself a one-time industry disrupter, is especially bullish about Michaels' idea of selling ad space. During Baldanza's tenure at Spirit, the carrier attempted to sell entire liveries as canvas for advertisers. Spirit even had meetings with the beer company Coors, though the effort ultimately proved unsuccessful.

"I am not optimistic for them," Baldanza said of Avatar. "But it's not completely crazy either." 


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