Houston Air (XP, Houston Hobby) is planning to take its first B737-800, on dry-lease from GECAS, within days as it prepares to launch scheduled operations focusing on connecting second-tier cities in the United States with large leisure markets, founder Andrew Levy told Bloomberg.

The airline, which is based on XTRA Airways (XP, Miami Int'l), will first operate charter flights during summer 2020 before venturing into the scheduled market later this year. Levy did not disclose the target size of the fleet, but he confirmed that the B737-800s would be outfitted in a single-class configuration for up to 189 passengers.

"The best way to compete in the airline industry is to not compete. I think that's what we did at Allegiant Air, and that's what we're looking to do here... In the US market, even a small niche can be a large opportunity. This is about offering choice and taking advantage of a market where the fare structure is relatively high," Levy said.

The start-up recently closed its first round of financing, having raised USD125 million from various investors. Levy said that this gives Houston Air "far more capital than we think we'll ever need".

He added that while the firm was currently registered as Houston Air Holdings, its ultimate trading name will probably be different.

Levy, who was President at Allegiant Air, Chief Financial Officer at United Airlines, and remains a Director at Copa Holdings Board, bought XTRA Airways in August 2018. The passenger charter airline subsequently sold most of its aircraft to Swift Air (United States of America) (now iAero Airways) but retained one B737-400 to keep its Part 121 certificate active. The 30-year-old aircraft is currently parked at Orlando Sanford.