Skybus is a locally-based cut-rate carrier that had a lot of gimmicks like $10 fares for the first few people to reserve each flight, and so forth. I knew a lot of people around here who used them, because the prices were quite good.
Apparently too good. They just announced, as of 9:30 pm this evening, that they are going out of business, effective tomorrow. So if you’re on a trip somewhere and were relying on Skybus to get you home again, tough donuts. If you are holding tickets for a future flight, they recommend you contact your credit card company to get a refund.
Not being hip to the ins and outs of corporate maneuvering, I gotta ask, is this kind of thing typical? Because I am kind of outraged that they had to know this was coming down the pike and yet they chose to screw over their customers rather than give them a couple weeks’ notice. Or, hell, a couple DAYS’ notice.
They are of course blaming the price of oil for their shenanigans.
Isn’t this the third airline to go out of business this week (after Aloha and ATA)? So I think it’s entirely plausible that oil prices were partly responsible for the business failure.
Oh, so do I. I just don’t think that oil prices went up so much in the last day that Skybus was forced to go out of business with almost zero notice to their customers, therefore stranding people who were already on trips and whatnot.
That, and the fact that their business model wasn’t very good, IMO.
The problem with advanced notice is that it ensures the airline’s demise. If you’re trying to figure out a way to keep operating, you need to avoid giving the impression that you are in trouble. Would you ever buy a ticket on an airline that you thought was going under? Once you make the decision to shut down every flight you operate is more lost money, so you shut down as soon as you can get the planes to the right places.
A friend of mine who lives in Columbus is up in arms about this. He’s upset that his tax dollars went to fund an airline that couldn’t do much but go belly up from the beginning. I can’t say I blame him.
Not all is lost for Skybus customers, though. Like Hawaiian picking up for Aloha’s stranded customers, JetBlue is offering cheap standby fares for stranded Skybus customers and employees alike.
I’m just wondering what the next airline to go will be.
Oh, man. A friend of mine flew to Dayton yesterday. I was joking on Thursday that if he’s lucky the airline won’t shut down out from under him before he comes back.
Without going searching for cites, I will say this as someone who has seen a few economic cycles from within the aviation industry.
Aviation is one of the first indicators of a real slowdown in the economy for two reasons.
1- Business
Orders slow, deliveries of product are down. Less cargo being shipped.
2- Personal travel
Usually combined with increasing unemployment, discretionary spending gets affected as families prepare for lean times.
Airlines on the bubble and their financiers are surely a little spooked right now. If a business plan is predicated on sustaining or building revenues, the best plan might be to bail on things now rather than trying to hang in there.
I’ll agree with you, but I think it would be a poor idea to cite Skybus as an example. Skybus failed because of a poor business model, doomed from the get-go. That, and their lack of any real customer service/support on any level. Skybus was able to fill its planes, but was unable to offset the rising cost of fuel (which is a huge, huge factor for airlines now) and maintain their cheap fares. Even at 100% load factor, they didn’t stand a chance of breaking even.
I’m much less familiar with ATA and Aloha-- sounds like ATA has been winding down ops for a while, and Aloha fell prey to some predatory pricing tactics (not to mention Champion and Skyway – boy, this has been a crap week for the industry!). I agree with you, though, about the airline industry being a general indicator of the economy as a whole.
ATA had been planning to phase out a few airports/lines, but they went out of business early this week with zero notice to customers or employees. The news reports were saying that employees were showing up at 4 am only to be find out they had no jobs. At midnight, the airline had said no more flights, the current planes land and we’re done.
A friend who lives in Hawaii got stranded on the mainland thanks to ATA shutting down with zero notice, and had to buy a full-fare ticket to get home. She was NOT happy.
It does seem like a bad week for airlines, doesn’t it?
Y’know, IANAAirline market analyst, but it would seem to me that in the USA market this is NOT the best time for running a knife’s-edge shoestring operation of a budget airline, and just the WRONG time to do so as a start-up based solely on supercheap seats(*). The market today seems to favor whoever can endure losing money the longest. Last week I listened to travel commentator Peter Greenberg on the radio say that, for instance, some airlines are stuck flying less fuel efficient planes, because at least those are already paid for.
(*Of course, the notion of rational airline ticket pricing is usually smacked down by the reality that the public has repeatedly demonstrated a willingness, given the choice between decent service and schedule for X and cattle-car redeye service for (X-9.99), to take the latter…)
This made me a little sad. When I flew out of St Auguestine this summer, it was the first commercial flight that airport had ever had, so I got to see them christen the plane as it flew in, which was really cool.
One of my close friends is a Flight Attendant for Skybus. She’s been there since the beginning (she’s second on the seniority list). She got notice of this at the same time the general public did. So, this morning she was employed, she got the email this afternoon, and as of midnight she’s out of a job.
She has two young girls at home and she’s a single mom. No severance or anything.