Tuesday, October 31, 2006
New Low Cost Carrier Operating from....Columbus, Ohio???
Skybus Airlines, a new Low Cost Carrier (LCC) that is to be based in Columbus, Ohio, intends to begin service early in 2007. 
In an unprecedented move for a startup airline in the U.S., last week Skybus announced an enormous order with airplane manufacturer Airbus for 65 new Airbus A319 aircraft. The order is said to be worth more than $3 billion.
Cletis's prediction: A year or two after launching, Skybus will be a memory.
Curiously, Skybus is to be based in Columbus, Ohio--a medium-market city with a population of just over 700,000. Although details of the new carrier are sketchy, it appears that Skybus intends to link secondary cities, and intends to connect them through Columbus.
Skybus does seem to have some pretty positive things going for it. First, they have started with more than $100 million in financing. Second, they have chosen to model the airline on Ireland's successful Ryanair. Moreover, they have attracted the help of some top industry executives to help run the thing, including Ryanair's yield manager, Jim McMahon (not the Bears' former quarterback). And finally, they've decided to launch with an all-new A319 fleet; an airplane proven to provide exceptionally low per-seat costs, and rather popular with passengers.
But industry insiders are not optimistic about Skybus's chances for success. First, and perhaps most problematically, most industry insiders believe that the Low Cost Carrier (LCC) segment of the U.S. air carrier industry is fully saturated--in other words, that all of the routes that can be economically operated by LCCs have been picked clean by existing carriers. Second, Skybus made the unusual choice of choosing Columbus, Ohio as their base of operations, which they plan to use as a hub for connecting traffic. The problem with this is that any LCC employing a hub depends on a significant amount of traffic originating in destined for the hub city (called "O & D" traffic). jetBlue, another LCC with a hub, chose New York City precisely for this reason. But at best, Columbus is a medium-market city that can't supply much O & D traffic. This problem is compounded by the fact Skybus is kicking off service with 65 planes, which means that there will be a tremendous amount of traffic flowing through Columbus. And finally, Skybus's decision to model itself on Ryanair may not go over well with the American traveling public. Ryanair is truly a bare-bones operation. No window shades. Seats don't recline. And the seats don't even have seat-back pockets in front of them. While we Americans may like low fares, one has to wonder whether people will be willing to crowd into airplanes that make San Francisco Muni's 30-line feel like a day at the Four Seasons.
In an unprecedented move for a startup airline in the U.S., last week Skybus announced an enormous order with airplane manufacturer Airbus for 65 new Airbus A319 aircraft. The order is said to be worth more than $3 billion.Cletis's prediction: A year or two after launching, Skybus will be a memory.
Curiously, Skybus is to be based in Columbus, Ohio--a medium-market city with a population of just over 700,000. Although details of the new carrier are sketchy, it appears that Skybus intends to link secondary cities, and intends to connect them through Columbus.
Skybus does seem to have some pretty positive things going for it. First, they have started with more than $100 million in financing. Second, they have chosen to model the airline on Ireland's successful Ryanair. Moreover, they have attracted the help of some top industry executives to help run the thing, including Ryanair's yield manager, Jim McMahon (not the Bears' former quarterback). And finally, they've decided to launch with an all-new A319 fleet; an airplane proven to provide exceptionally low per-seat costs, and rather popular with passengers.
But industry insiders are not optimistic about Skybus's chances for success. First, and perhaps most problematically, most industry insiders believe that the Low Cost Carrier (LCC) segment of the U.S. air carrier industry is fully saturated--in other words, that all of the routes that can be economically operated by LCCs have been picked clean by existing carriers. Second, Skybus made the unusual choice of choosing Columbus, Ohio as their base of operations, which they plan to use as a hub for connecting traffic. The problem with this is that any LCC employing a hub depends on a significant amount of traffic originating in destined for the hub city (called "O & D" traffic). jetBlue, another LCC with a hub, chose New York City precisely for this reason. But at best, Columbus is a medium-market city that can't supply much O & D traffic. This problem is compounded by the fact Skybus is kicking off service with 65 planes, which means that there will be a tremendous amount of traffic flowing through Columbus. And finally, Skybus's decision to model itself on Ryanair may not go over well with the American traveling public. Ryanair is truly a bare-bones operation. No window shades. Seats don't recline. And the seats don't even have seat-back pockets in front of them. While we Americans may like low fares, one has to wonder whether people will be willing to crowd into airplanes that make San Francisco Muni's 30-line feel like a day at the Four Seasons.
