How two executives started new airlines as aviation’s biggest crisis hit

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(NEW YORK) — As coronavirus concerns decimated the demand for travel and the aviation industry was faced with its biggest crisis in history, two former airline executives were about to do the unthinkable: start an airline.

Major U.S. airline CEOs were just trying to stop the bleeding and save their companies, while Andrew Levy, 51, and David Neeleman, 61, were just starting up — launching the first two new U.S. airlines in more than a decade — during a global pandemic.

They are both betting their low prices and smaller, no-hassle airport destinations will be enough to win over customers during the summer post-lockdown travel surge.

Levy described starting Avelo Airlines as an “itch” that he’s “wanted scratched for a really long time.” It started 27 years ago when he began working with the founders of now-defunct ValuJet.

“They built this phenomenal business that just grew like crazy and I had a front-row seat to watch it all,” he told ABC News. “I got to see capitalism at work in front of me, and see what happens when we take risks and we progress with hard work. I thought I want to be like those guys, I want to be the ones who start with the company.”

In January 2020, taking what he learned from Allegiant and United, Levy got the green light from the Department of Transportation to start Avelo.

Then, COVID-19 hit.

“It was a little bit of a shock for all of us,” Levy said about watching the number of fliers dwindle, but “I probably was less affected by that than many of my investors. I kind of was always optimistic that it would come roaring back.”

At its lowest point, less than 100,000 people were flying each day nationwide. Airlines scrambled to pull flights out of smaller airports, causing some, like Hollywood Burbank Airport, to lose service.

“We were fortunate enough to have the opportunity to go in there because of COVID,” he said. “So many airlines cutback service there, and as a result we can go in there at a level of service with airplanes that we couldn’t have done a couple of years ago.”

Avelo began service in April and plans to fly 11 routes between Burbank and vacation destinations this summer, mostly on the West Coast, for as little as $19.

David Neeleman’s Breeze Airways launched a month later and will carry leisure travelers in the eastern and southern parts of the country. Breeze’s fares start at $39.

“There’s a ton of pent-up demand,” Neeleman told ABC News, “and there’s a lot of money people didn’t spend during the pandemic.”

The JetBlue founder only had 55 people on the payroll at Breeze when demand plummeted.

“We had the foot on the gas and the brake at the same time,” he said. “And I said we just have to ease into this and there’s no reason to launch an airline at the heat of the pandemic. You have to have some kind of vision or foresight to look ahead, and try not to seize up in the moment when things are at their worst.”

His team worked with regulators virtually “spread out all over on Zoom.”

“Just getting an airline certified under normal circumstances is a feat that is very difficult,” he said, “and has rarely been done over the last 20 years.”

Neeleman’s vision for Breeze is getting travelers to their destination “twice as fast for half the price” choosing to establish non-stop routes between smaller airports like Hartford, Connecticut, and Charleston, South Carolina, that would have otherwise required a layover.

“When you don’t have to worry about your flight getting canceled or delayed or missing your connection and all the stress that goes with it, then people just travel more often,” Neeleman said.

Like other low-cost carriers, Breeze and Avelo will both charge for baggage fees and additional legroom.

“Our mission is to inspire travel,” Levy said. “We want to inspire travel by making it easy to do so, and that is really low fares, but also just a convenient, pleasant experience.”

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Robinhood to pay record-high sum of nearly $70 million to settle regulator’s probe

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(NEW YORK) — The online brokerage that promised to “de-mystify finance for all” agreed Wednesday to pay nearly $70 million to resolve allegations it misled millions of customers, approved trades for thousands of ineligible customers and failed to supervise technology that accepted customer orders.

The sanctions are the largest financial penalty ever ordered by the Financial Industry Regulatory Authority, which said it reflected the “scope and seriousness” of Robinhood’s violations.

The investing platform will pay regulators $57 million, along with $12.6 million in restitution with interest to thousands of harmed customers.

“This action sends a clear message — all FINRA member firms, regardless of their size or business model, must comply with the rules that govern the brokerage industry, rules which are designed to protect investors and the integrity of our markets. Compliance with these rules is not optional and cannot be sacrificed for the sake of innovation or a willingness to ‘break things’ and fix them later,” said FINRA’s Jessica Hopper in a statement announcing the regulatory enforcement action.

Robinhood attracted regulatory scrutiny earlier this year when investors used it to speculate on GameStop, AMC Entertainment and other so-called meme stocks that seemed to increase in value based on social media frenzy without the underlying financials. However, FINRA suggested its investigation stretched back five years.

During certain periods since September 2016, the firm has negligently communicated false and misleading information to its customers, FINRA claimed, concerning whether customers could place trades on margin, how much cash was in customers’ accounts, how much buying power or “negative buying power” customers had, the risk of loss customers faced in certain options transactions and whether customers faced margin calls.

FINRA pointed to the suicide of one Robinhood user who in a note found after his death, “expressed confusion as to how he could have used margin to purchase securities because, he believed, he had not ‘turned on’ margin in his account.” Robinhood also displayed to this individual, as well as others, inaccurate negative cash balances, FINRA said.

The regulating authority also accused Robinhood of failing to exercise due diligence before approving customers to place options trades, relying instead on algorithms with limited oversight. The firm also failed to supervise the technology it relied on to provide its broker-dealer services, FINRA said.

In settling the matter through the fine, Robinhood neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.

“Robinhood has invested heavily in improving platform stability, enhancing our educational resources, and building out our customer support and legal and compliance teams,” Robinhood spokesperson Jacqueline Ortiz Ramsay told ABC News. “We are glad to put this matter behind us and look forward to continuing to focus on our customers and democratizing finance for all.”

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As prices for insulin skyrocket, Walmart launches ‘affordable’ brand

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(NEW YORK) — Walmart announced it is launching its own private brand of insulin, which the big box chain says will save customers with diabetes up to 75% on the lifesaving drug.

Walmart’s ReliOn brand will sell private label NovoLog short-acting insulin that is manufactured by the pharmaceutical firm Novo Nordisk.

The analog insulin vials and pens will save customers between 58% to 75% off the cash price of branded insulin products, or up to $101 per vial or $251 per package of “FlexPens,” the retailer said.

The medication will be available in Walmart pharmacies starting this week, and Sam’s Club pharmacies beginning in mid-July.

“We know many people with diabetes struggle to manage the financial burden of this condition, and we are focused on helping by providing affordable solutions,” Dr. Cheryl Pegus, the executive vice president of Walmart Health and Wellness, said in a statement Tuesday. “We also know this is a condition that disproportionately impacts underserved populations.”

Pegus said Walmart’s new insulin offerings are part of their commitment to improve access and lower the cost of care.

The medical costs for patients with diabetes can be an estimated $9,601 per year, according to the American Diabetes Association. On average, the advocacy group says people diagnosed with diabetes have medical expenditures approximately 2.3 times higher than what expenditures would be in the absence of diabetes.

“We welcome all affordable solutions that make diabetes management more accessible to millions of Americans living with diabetes,” Tracey D. Brown, the chief executive officer of the American Diabetes Association, said in a statement accompanying Walmart’s announcement. “We encourage everyone to ask their health care provider questions to better understand what the right and affordable treatment is for their unique medical needs.”

The price of insulin in the U.S. has spiked significantly over the past decade, and remains dramatically higher than in most other developed countries. The average gross manufacturer price for a standard unit of insulin in 2018 in the U.S. was more than 10 times the price compared to the same sample from 32 foreign countries that are part of the Organisation for Economic Co-operation and Development, according to a 2020 U.S. Department of Health and Human Services report. The average U.S. price was $98.70, compared to $8.81 in the 32 non-U.S. OECD countries.

Despite years of advocacy for policy changes to keep the cost of the drug low, Americans living with diabetes have seen little reprieve from federal lawmakers to address the skyrocketing prices.

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Limited recall of fresh blueberries due to potential Cyclospora contamination

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(NEW YORK) — With berries being a staple fruit of the summer, check your fridge to make sure your container of Dole fresh blueberries is safe to eat.

Dole Diversified North America, Inc. has voluntarilly recalled a limited number of cases of its blueberries due to potential Cyclospora contamination.

The impacted products were packaged in a variety of plastic clamshell container sizes and distributed in four U.S. states — Illinois, Maine, New York and Wisconsin — and two Canadian provinces: Alberta and British Columbia.

The U.S. Food and Drug Administration has advised consumers to check any Dole fresh blueberry products in their homes and discard those matching the production description, UPC codes or product lot codes it has listed.

Check here for a full list of UPC codes, where to find the printed product lot code on the label and more.

“Cyclosporiasis is an intestinal infection caused by the Cyclospora parasite. A person may become infected after ingesting contaminated food or water,” the FDA said. “Common symptoms include severe abdominal pain, diarrhea, nausea and vomiting, body aches and fatigue. The infection is treated with antibiotics and most people respond quickly to treatment.”

At the time of publishing, there have been no illnesses reported in association with the recall. No other Dole products have reportedly been affected.

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Zac Posen releases genderless wedding band, engagement ring collection with Blue Nile

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(NEW YORK) — Celebrity fashion designer Zac Posen is hitting the fashion scene with a brand new wedding collection.

The former Project Runway judge, along with global jewelry brand Blue Nile, released a curated line of genderless wedding bands and engagement rings.

The ZAC Zac Posen collection is made up of 12 designs that include everything from uniquely designed princess cuts to single-round styles.

The collection also features a variety of ring sizes ranging from 4 to 13 and prices range from just under $1,000 to $6,750.

Posen said that he’s always welcomed the challenge of designing occasion jewelry since he is creating pieces that people look forward to wearing for the rest of their lives.

“Engagement rings and wedding bands are one of the purest and oldest symbols of love and marriage that have crossed over traditions and withstood time,” he said in a statement. “For this collection, it was important for me to create unique and ageless designs that also celebrate love, unity and marriage for all.”

Beloved by celebs, the designer also worked with Blue Nile in 2014 to create other wedding rings and band styles. He says it’s been exciting to watch how Blue Nile continues to support designers who are reimagining the wedding category and the traditional symbols of love and marriage.

“With so many of us celebrating unity and love this month, it felt like the right time to release an inclusive line of engagement rings and wedding bands — a collection that was purposefully designed to represent love, regardless of gender,” Posen said in a statement. “The traditional idea of marriage is evolving, and the wedding category is finally starting to reflect that.”

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Major opioid epidemic trial begins in New York

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(NEW YORK) — A dozen drug manufacturers and distributors accused of fueling the nation’s opioid epidemic face a jury for the first time Tuesday during opening statements at what could be the most consequential opioids trial so far.

New York and two of its largest counties, Nassau and Suffolk on Long Island, are seeking to hold Teva Pharmaceutical Industries, Endo International, McKesson, Cardinal Health and other corporations responsible for the deadly epidemic, accusing them of contributing to a public nuisance.

Johnson & Johnson avoided this trial by settling Saturday for $230 million. CVS settled with Nassau and Suffolk counties.

There have been similar cases to go on trial in California and in West Virginia. Oklahoma won a $465 million judgment in the nation’s first trial. Unlike those, however, the one taking place in Central Islip is being heard by six jurors who will weigh assertions that both marketing and distribution of narcotic painkillers fostered widespread addiction and abuse.

The trial is unfolding in a 450-seat amphitheater at the Touro College Law Center, rather than a state courthouse, to accommodate a legion of lawyers and spectators.

“The eyes of the world are on New York as we prepare to lay bare the callous and deadly pattern of misconduct these companies perpetrated as they dealt dangerous and addictive opioids across our state,” New York Attorney General Letitia James said in statement provided to ABC News.

If drug companies are found liable for harms in Nassau and Suffolk, they may effectively be liable for harms in dozens of other New York counties. The trial could also be a bellwether for other opioid cases across the country.

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Highest gas prices of 2021 cast shadow over holiday weekend road trips

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(NEW YORK) — The average price of gas in the U.S. — $3.10 as of Tuesday, according to the American Automobile Association — is the highest so far in 2021 and there are no indicators it will fall ahead of the holiday weekend.

Spiking global demand for crude oil as the pandemic eases is pushing up gas prices, as well as surging demand for air and road travel as more Americans become vaccinated. Meanwhile, limited but concerning reports of gas outages at stations across the country related to delivery issues are also ringing alarm bells for travelers looking to hit the road this weekend.

Presently, gas outages should not be cause for widespread concern, according to Patrick DeHaan, head of petroleum analysis at the fuel-tracking site GasBuddy.

“So far, the problem is very limited and random in nature,” DeHaan told ABC News, adding that stations and truckers are running behind schedule on fuel deliveries “to a very few amount of stations.”

“Most motorists won’t even notice this, but as demand ramps up the nation needs hundreds more tanker truck drivers just from last year, in addition to the long-term squeeze we’ve seen,” he added.

As most Americans have varied enough dates and times that they plan to hit the road, DeHaan said he doesn’t expect shortages to be a major issue for drivers this weekend though they “could be something that a few notice.”

“The good news is there’s plenty of gasoline — the EIA [Energy Information Administration] reported last week that fuel production reached a staggering 10.3 million barrels of gasoline per day — amongst the highest I’ve recently seen and just below the record of 10.7,” he added. “There’s plenty of fuel, but, like many industries are dealing with right now, there remains a labor shortage and for the fuels industry, it’s manifesting itself in stations that can’t stay caught up on gasoline.”

Meanwhile, AAA forecasts a record-breaking 43.6 million Americans will hit the road for travel from Thursday to Monday.

This influx of travelers comes as nearly 90% of U.S. gas stations are selling regular unleaded gas for $2.75 per gallon or more, according to Jeanette McGee, a spokesperson for AAA. McGee added in a statement that motorists will pay the most to fill up this July 4 weekend since 2014.

States that saw the largest weekly price increases, according to data compiled by AAA, include Utah (12 cents per gallon), Indiana (11 cents) as well as Oregon and Washington (each 9 cents).

Separately, McGee told ABC News that major metropolitan areas such as Atlanta, Boston and San Francisco will see traffic three to five times higher than on a typical day, and urged drivers to avoid traveling at peak hours. She recommends avoiding travel between 3 p.m. and 6 p.m. on Thursday and Friday, and to drive earlier in the day on Monday.

Gas prices have been climbing steadily since the beginning of the year. Tuesday’s national average of $3.10 per gallon is some 2 cents more expensive than the average last week, 5 cents more expensive than last month, and 92 cents more expensive than the average price at the same time last year.

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United places largest aircraft order in its history

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(NEW YORK) — United Airlines is betting big on the post-pandemic travel boom.

On Tuesday, United announced the largest aircraft order in the airline’s history and the largest for the industry by a single carrier in more than a decade.

“Travel is back,” United Airlines CEO Scott Kirby said in an interview with ABC News. “There’s an amazing amount of pent-up demand for people to connect with each other and reunite.”

The 270 narrow-body jet order is potentially worth a reported $30 billion. It includes up to 200 Boeing 737 MAX and 70 Airbus A321neo aircraft. United also announced its going to be retro-fitting all of its narrow-body cabins — adding larger overhead bins, and entertainment screens on all seats.

As a result of adding new planes, United said it expects to create approximately 25,000 well-paying, unionized jobs over the next few years.

“They’re really careers and because you can have a job — even without a college education required, as a flight attendant or a gate agent — you can get to a six-figure salary with a good union job by the time you get to the top of the seniority scale,” Kirby said.

The order is a sign of hope that the dark days of decimated air travel are over.

The Transportation Security Administration on Sunday screened 2,167,380 people nationwide — the highest checkpoint volume since the start of the pandemic. It was just 18% shy of traveler volume on the same day in 2019.

United CEO Scott Kirby revealed on Monday that his airline is now profitable for this first time since the start of the pandemic.

Kirby posted on Instagram saying, “This achievement is a result of our employees’ perseverance and their commitment to our customers — all under the toughest of circumstances.”

U.S. airlines received billions of dollars in federal aid during the pandemic to keep employees on their payroll.

“While we’re not quite out of the crisis yet as we wait for international and business travel to return in more meaningful ways, today’s achievement feels just as good as seeing busy airports once again,” Kirby said.

All of the major U.S. airlines and the TSA have struggled with staffing as air travel has rapidly jumped from historic lows to approaching pre-pandemic levels.

When air travel came to a halt in March 2020, thousands of employees were offered early retirements and buyouts, but now the airlines are desperate to fill these positions again.

American Airlines canceled about 400 flights last weekend, in part due to staffing issues. The airline is now warning hundreds of flights will be canceled in the coming weeks.

United Airlines is desperate for baggage agents.

And at one point over the Memorial Day weekend, Delta Air Lines’ automated service told customers the wait time to talk with a reservation agent was more than 21 hours.

Experts said travel numbers will continue to rise this weekend as Americans celebrate the July 4th holiday.

AAA is projecting 3.5 million people will take to the skies from July 1 to July 5.

American Airlines expects to operate nearly 5,500 daily flights from Thursday to Monday, with the busiest travel days being Thursday and Friday, a spokesperson said.

United Airlines expects to fly 2 million customers from Thursday to Tuesday. The airline said Thursday and Monday will be busiest.

“July 1 is going to be the busiest day since COVID started, but it’ll only have that record for four days because July 5 is going to break it,” Kirby said. “It’s just another indication of how we really are on the road to recovery.”

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