Posted by Tom on Wednesday, May 27, 2009
Sound familiar? Well, Toledo is just halfway across the state from Columbus, the home of the infamous Skybus, which went bust less than a year after it started flying. And Skybus' famous limited $10 fares are awfully similar to JetAmerica's $9 fares, although only a certain number of seats (9 to 19) on a flight will be at that price.
So, will JetAmerica (sometimes spelled Jet America) survive? The concept of the ultra-low-fare carrier (where pretty much everything carries its own fee) hasn't really taken off in the US. Sure, carriers like Spirit and Allegiant have managed to make the model work, but these airlines fly mostly vacation travelers to and from Florida and Las Vegas. JetAmerica might suffer because Toledo certainly doesn't have a lot of originating and departing traffic - something that helped contribute to Skybus' demise.
Yet JetAmerica is also being heavily subsidized by some of the airports that it flies to; Melbourne, Florida, Toledo, Lansing and South Bend airports are all giving JetAmerica $1.4 million in grants for a year, not to mention $1.1 million in marketing help and $867,000 in waived fees. These subsidies can help the airline weather any spikes in oil prices, but at the moment, oil prices are relatively low (sky-high oil prices helped to take down Skybus). And CEO John Weikle claims that JetAmerica's goal is to make money along the same lines as Allegiant, by "stay[ing] away from the competition."