Yesterday Columbus, OH-based Skybus Airlines operated its first flight from Columbus to Burbank, CA, and also operated flights to Kansas City and Portsmouth, NH. Although I haven't flown Skybus myself, an ABC News reporter did, and reported on his experience (he calls the airline 'The Greyhound Bus of the Skies'). He reports extensively about the 'add-ons' (e.g. snacks, drinks, pillows) that you can purchase onboard, and quotes the CEO of Skybus as saying, "Keep in mind that most of America shops at Wal-Mart. Most of America can do basic addition."
The article also points out that one way Skybus keeps fares low is by outsourcing everything - including the airline's spokesperson, who works for a PR firm in Columbus. Yet even though costs are low, Skybus' business model - while imitating the very successful Ryanair - might have some problems in the future. For example, it requires passengers to book their own connecting flights. If you lived in Burbank and wanted to travel to, say, Portsmouth, you would have to book a Skybus flight from Burbank to Columbus, retrieve your luggage, and go through the entire process again from Columbus to Portsmouth. Whether customers are willing to go along with this in order to get a cheap fare (even though most tickets aren't as low as $10) or not remains to be seen.