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Start-Up Airline Banks on Rock-Bottom Prices

By Dan Schlossberg
ConsumerAffairs.com

April 25, 2007

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At least the toilets are free. So far. Use of the restrooms may be the one thing Skybus Airlines gives away when it starts flying on May 22.

The Columbus-based carrier is carrying the word "discount" to an extreme -- even charging passengers $2 a pop for pop (soda to the uninitiated).

It will cost $5 for each piece of checked luggage and twice that much for what the startup airline calls a "preferred seat," assuming that there are such things on an Airbus 319.

Like the late, lamented People Express, Skybus is striving to be a no-frills flyer.

Planes will have Skybus pilots and flight attendants but airport staffers, from baggage handlers to maintenance men, will be independent contractors rather than employees. Check-in counters also will be manned by outsiders.

The airline aims to give passengers exactly what they want -- cheap tickets -- but won't provide much else.

Skybus won't even have a toll-free phone number; all reservations will be made through its website. The formula apparently works, since the airline sold 30,000 tickets in its first day of operation.

Dirt-cheap prices helped: no Skybus ticket tops $330 (not including the usual taxes and security fees) and as many as 10 per flight will priced at $10 each. That's no typo: ten bucks (plus tax). Passengers will also be able to buy one-way tickets for prices ranging from $40-$50.

Cracking the Columbus market may be the biggest challenge Skybus faces: fellow discounters JetBlue and Southwest are already there, along with American, United, Continental, Delta, US Airways, and Northwest.

Southwest owns the lion's share of the market (22%), with Delta (17%) the current runner-up. Skybus hopes to challenge those figures.

The new carrier will fly from its Ohio hub to airports in or around Seattle, Los Angeles, and Oakland in the West; Kansas City in the heartland; and Boston, Richmond, Greensboro, and Ft. Lauderdale in the East. Its schedule will be woven around four Airbus 319s, with another four to be added later this year and 65 more coming over the next five years. The planes hold 144 passengers each.

Skybus hopes to emulate the business model of Ryanair, an Irish discounter that serves many European markets by moving huge volumes of people willing to sacrifice once-expected amenities for rock-bottom rates.

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