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Aloha, ATA, Skybus: Who's Next?


Low-cost airline Skybus shuts down

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Apr 05, 2008

Skybus Airlines, which offered limited service out of Fort Lauderdale/Hollywood International Airport, abruptly closed shop Friday night, the latest casualty in an airline industry stressed by rising fuel costs and a slowing economy.

Its last flight left Broward County and touched down in Columbus, Ohio, shortly before 1 a.m. Saturday.

The airline's already minimal presence at the Fort Lauderdale airport was reduced to two rolling ticket kiosks, each with a sign saying the airline had ceased operations ``effective today.''

On Saturday, no employees were at a counter it shared with Sky Service, a carrier with flights to Canada. The companies swapped signs to service passengers when flights were due.

Two flights had been scheduled Saturday -- one arriving from Greensboro at 4:42 p.m., the other departing at 5:07 p.m., back to Greensboro.

An announcement posted Friday night on the low-cost carrier's website did not list an alternative carrier for passengers, but told them to contact credit card companies to arrange refunds.

''Our financial condition is such that our board of directors felt it had no choice but to cease operations,'' the statement said.

While small-carrier shutdowns and groundings for back-logged maintenance have hit the airline industry hard in recent weeks, Fort Lauderdale airport aviation director Kent George said he sees brighter days ahead.

He called the shutdown of Skybus, which operated four flights a day out of Fort Lauderdale, ``an indication of undercapitalized carriers that tried to make it but couldn't.''

George said he expects to see some airlines merge, fares rise, and possibly some flights cut when planes aren't flying to capacity.

''That may reduce the number of people flying on the discretionary side,'' he said of tourists and leisure travelers. But ``we've been seeing some strong growth, even with the increase in prices and increase in fuel.''

Skybus began service at Fort Lauderdale-Hollywood last May, one of the first nonstop service to Columbus from there in at least five years. It linked as many as 800 South Florida passengers with Columbus and Greensboro each day, said airport spokesman Greg Meyer.

The announcement means the company will cease operating 74 daily flights to 15 U.S. cities. It has about 350 employees at its main hub in Columbus, and another 100 at a second hub at Piedmont-Triad International airport in Greensboro, N.C. Employees of the airline that once offered flights for as little as $10, learned of the shutdown and intention to file for bankruptcy Friday night.

The company, among the best-financed airline startups in the country, is privately owned, and had raised $160 million, including $25 million from individuals and Columbus-based corporations like Nationwide insurance, the company's first advertiser.

When Skybus began operating, Ray Neidl, an airline analyst with Calyon Securities said the company's financing was``adequate for a start-up, but you can run through a lot of money very quickly -- it's an airline.''

Skybus Chief Executive Michael Hodge said in a statement that fuel costs combined with the plummeting economy proved insurmountable.

''We deeply regret this decision, and the impact this will have on our employees and their families, our customers, our vendors and other partners, and the communities in which we have been operating,'' he said.

Hodge said any passengers affected by the shutdown who have reservations through Sept. 2, are eligible for a refund.

Skybus has endured some bumps since it began flying May 22, 2007. Over two days during Christmas week, the airline canceled as many as a quarter of its flights because of problems with two planes. Recently, it has been dropping flights and destinations.

The company drew passengers by offering at least 10 seats for $10 on every flight. It advertised an a la carte, pay-per-service flying experience. Checking a bag cost $12 at the ticket counter, for instance, while boarding with the first group of passengers cost $15.

''Most airlines tell you you're not paying for baggage, but the fact is, you are paying for it,'' company Spokesman Bob Tenenbaum told the Associated Press. ``It's built into the cost.''

The announcement adds to a string of bad news for airlines, which have been hurt by a slowing economy, high fuel prices and maintenance concerns.

ATA and Aloha Airlines both stopped flying this week after filing for bankruptcy protection. American, Southwest and Delta airlines have had to cancel flights recently to address safety concerns about some aircraft.

All was quiet near what used to be the Skybus counter around noon Saturday afternoon in Fort Lauderdale. A Broward sheriff's deputy, who wouldn't give his name, said he had to share the bad news with a couple arriving for a flight earlier in the day.

''We had to tell them, they're out of business,'' he said.

miamiherald.com

Low-cost airline Skybus shuts down



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