Skybust: Skybus ceases operations

photo by OZinOH
Skybus, the Columbus, Ohio-based no-frills carrier that famously started flying last May with $10 fares, announced on Friday that it will stop flying on Saturday, April 5. It becomes the fourth US carrier in less than a week to shut down (joining Aloha, Champion Air, and ATA). The news only broke late on Friday night, surprising both customers and employees.

"Skybus struggled to overcome the combination of rising jet fuel costs and a slowing economic environment," the airline said in a statement. "These two issues proved to be insurmountable for a new carrier. We deeply regret the impact this decision will have on our employees and their families, customers, vendors, suppliers, airport officials and others in the cities in which we have operated. Our financial condition is such that our Board of Directors felt it had no choice but to cease operations."

Why did Skybus fail? It's a question that will probably be debated for some time to come. Obviously, fuel costs and the state of the US economy are two major factors, but they've impacted every airline, not just Skybus. Here are a few Skybus-specific thoughts:
  • Skybus did fly from secondary cities that, in many cases, were too far from the "major" cities that they were trying to market to. For example, what was listed as Hartford, CT on their website was really Chicopee, MA. In some cases, this was OK, but because there aren't many ground transportation options between these city pairs that Skybus chose, it was sometimes difficult and expensive to get to their destination city.
  • Skybus also flew cross-country routes with a rather small fleet of Airbus A319s (it had only 12 planes at the time of shutdown), which meant that its airplanes weren't flying as many hours a day as they could have. Skybus' small fleet also left it vulnerable to losing money on under performing routes.
  • Skybus didn't offer the option for connecting flights, meaning that they really limited themselves to those who were just flying between two cities that the airline served directly.
  • Rapid growth. While this isn't necessarily a bad thing, Skybus did expand too quickly. It often would start out a new route and soon abandon it if it didn't make money, and while this can work, Skybus' small fleet meant that a significant proportion of its airplanes were on money-losing routes.
  • Little customer service, in my opinion. Skybus didn't even have a toll-free number for passengers to call if something went wrong with their travel plans. And although the airline tried to get passengers to purchase food and drinks on board the plane (none were provided for free), its attempts to get passengers to dispose of the food and drink they already had always seemed unusual.
Regardless of the reasons, the failure of Skybus (and the other airlines that have closed in the past week) are indicative of the tough times that the US airline industry faces - we're likely to see more tough times ahead and, sadly, more airline shutdowns, in the coming months.


jimyvr said...

Point 1 (secondary cities), 3 (no connecting flights), 5 (little customer service) doesn't really stands that well for backing up why Skybus probably failed.

If those are considered "valid", easyJet or Ryanair would've gone down the drain right away.


WoB said...

I am one of the stranded passengers. This was my second Skybus flight.

Because of the cheap nature of the flights, I drove three hours from my home to take these flights.

While I'm not positive that all of the cities were the optimum choices, I think there is a lot of value in what they delivered. I was perfectly willing to forego telephone customer service to get a cheap flight.

In my opinion, this new startup simply didn't have enough cash to make it through the transition. Unlike the major carriers, who have run hundreds of millions in the red for months at a time, this airline couldn't afford to pay the payroll. Plus, who would sell services to this airline if they tried to use bankrupcy re-organization?

I think there is definitely a market for this type of airline, but the economy and fuel costs will have to stabilize before they can be successfull. With the failure of three other carriers in the past few days, it will take a long time before investors will put money in another startup airline.

The Airline Blog said...

In response to the first comment: If I'm not mistaken, most of the secondary cities/airports that the European ULCCs (ultra-low cost carriers, such as Ryanair and easyJet) fly into are often well connected with direct ground transportation to the nearby "big" city. Of course, secondary cities and low levels of customer service influenced Skybus' demise, but were not the leading factors. The European airline industry is in a different state than the US', and I don't think that one can draw too many parallels between Skybus and Ryanair/easyJet.

Ltblunt said...

This completely sucks for the many folks who are stuck someplace unfamiliar. People are very vulnerable when traveling and it is a crime to take advantage of them. I hope that the executives over at Skybus end up before a Senate Hearing this fall!

vaibhav said...

Sanjeev Naik, First Mayor of Navi Mumbai said navi Mumbai shall have sky Bus Service

Regular load shedding, rising land prices, the mangroves controversy, fuming riots, lack of amenities… No, we are not talking about a remote village in Maharashtra but the much-ballyhooed city of the 21st century, Navi Mumbai. Many residents are quite skeptic about the growth of this city, inevitably comparisons with Mumbai do happen. But the first mayor of the city, Sanjeev Naik appears quite optimistic. He also has big plans for the city. Vashi2Panvel had a tête-à-tête with Naik to know his opinions and future plans for Navi Mumbai...

Anonymous said...