Startup airline Skybus loses $16 million in 3 months
(TVLW) - Skybus, a new airline that offers some tickets for $10, lost $16 million during the three months that ended Sept. 30.
The Columbus-based airline said it expected to lose money before becoming profitable next year.
The results were "in line" with expectations, said Bob Tenenbaum, airline spokesman.
Analysts said the results are troubling.
"In fairness to them, this is their first quarter, and the traffic growth has been quite impressive," said Joseph Schwieterman, a DePaul University professor and former pricing analyst for United Airlines. "But their costs may not allow selling so many seats at nominal prices."
Skybus sells at least 10 seats on every flight for $10.
Industry consultant, Mike Boyd of Evergreen, Colo., said Skybus needs to change its business model. "This is just not a very good plan, but that doesn't mean they can't turn it around by scrapping the model," Boyd said.
Skybus made its first flight in May.
The company plans to fly to 15 cities from its Columbus hub by the end of the year, trying to compete with Southwest, JetBlue and other no-frills airlines.
ohio.com
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Comments
What has happened to Skybus is expected for startup airlines and the fortunes are to change for the better within the next three months even without changing the business model.
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