Skybus shuts down abruptly, third scheduled U.S. airline to fold this week
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Late Friday, Skybus announced on its website that it would shut down by the end of the day. If you hold tickets on the discount airline for travel today (Saturday, April 5, 2008) or later, call your credit card company immediately and try to secure a refund.
I say “try,” because you may not be able to get your money back. If you booked tickets well in advance and you’ve already paid the bill, you may run into snags with your credit card company in getting a chargeback. You generally can dispute charges when a company fails to deliver the services it promised, but if you’ve paid your bill, your bank is far less likely to work on your behalf. Banks vary; call them. Now.
If you’re already halfway into an itinerary, you can try to get your ticket honored by another airline, but as Chris Elliott has pointed out after previous airline shutdowns, there’s no law requiring them to do so. If any other airline accepts a Skybus ticket, even with a surcharge, it’s as close to an act of charity as you’ll ever see from a for-profit enterprise.
So far, no statement has appeared on any of the major airlines’ websites to woo Skybus customers. Who would want to attract a cheapskate customer who only paid a measly $10 one-way fare, I guess. In contrast, you’ll see announcements of standby policy for stranded ATA and Aloha customers on airline websites like Northwest, US Airways and United. For example, ATA customers can fly standby (on a space-available basis… good luck) on US Airways for $100 per segment. Not truly “cheap,” but better than paying a walk-up fare to, say, get back to the U.S. mainland from Honolulu.
But back to Skybus: Their failure is a surprise, but only for its timing. The third scheduled airline this week to close its doors, after the much older Aloha and ATA. (I’m sorry, I don’t count the charter airline Champion Air, which also folded this week. Bad week for the industry.) High fuel prices and bad business models combined to create this week’s carnage.
I never flew Skybus, though I had been considering trying them out on a Greensboro-Chicago/Gary flight. I flew Aloha inter-island in 1994, which was pleasant, and I flew ATA in 2003, which was less than pleasant. (I swore never to fly ATA again after a miserable experience with their front-desk staff at Chicago/Midway, who refused to issue a boarding pass, even though I was at the gate more than 45 minutes before the flight. “You’ll never make it through security in time.” “I bet I can.” “Nope, you won’t. The next flight is in 7 hours. You’re on the standby list.” I’ve never been angrier at an airline employee.)
Taking three airlines out of commission is pulling a good chunk of supply from the market, especially to Hawaii, which will allow other airlines to raise fares. For the short term, these airline failures are bad news for all flyers, not just the folks who hold tickets on the defunct carriers.
But rest assured, much like lottery tickets always find a market, capital always seems to flow to start-up airlines, though it’s not overnight. Perhaps a Charleston, West Virginia based airline might be the next big thing. Or even a Louisiana-themed discount carrier named after gumbo.
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April 5th, 2008 at 10:26 am |
I agree that Hawaii was hit hard this week. I fear that inter-island flights will rise sharply. The Hawaii Superferry is one alternative for Oahu/Maui travel. The ferry has been in dry dock for a while, but will start operations again on Monday. (They weren’t due to start operations again until the 22nd, but I speculate that they are trying to take advantage of the Aloha demise.) I’ll be keeping my eye on inter-island prices.
April 5th, 2008 at 10:39 am |
Matt,
How come so many US-based budget airlines are folding, while the European ones are profitable? In fact, I seem to discover new ones quite regularly, i.e. WizzAir, Malev, etc.
What’s so special about the American market that only Southwest seems to be able to survive the crunch?
- Jack
April 5th, 2008 at 12:56 pm |
Jack, I think the staff at Malev may be quite offended to be told they work for a budget airline - they are Hungary’s national carrier and part of the oneWorld alliance!
April 5th, 2008 at 10:19 pm |
Too bad for Skybus… We flew them from GSO - GYY two weeks ago (Springbreak): 90% full to Gary and maybe 60% on the return leg. They arrived early on the ongoing flight but the return flight was a good 1 hour late. Very efficient in filling and preparing the plane. Pleasant and overall a good experience.
We paid 400$ / 4 persons. 40-50% of O’Hare’s price… I almost bought 4 new tickets with them…
April 6th, 2008 at 10:22 am |
Hello,
My family of 3 flew to and from Wisconsin in Mid-March. We actually booked from GSO to CMH to Milwaukee and then returned the same way with an overnight scheduled layover with the in-laws. Outside of three go-arounds in Columbus on the first flight, we had a great experience. I was actually looking earlier this week to book another flight to Columbus in August . $25 and $35 respectively. BTW, for a family of 3 to fly to Milwaukee, we flew for under $400.
April 7th, 2008 at 3:24 pm |
This completely sucks for the many folks who are stuck someplace unfamiliar. People are very vulnerable when traveling and it is a crime to take advantage of them. I hope that the executives over at Skybus end up before a Senate Hearing this fall!
www.ihateskybus.com
April 7th, 2008 at 8:08 pm |
Jack,
That’s a really good question, and I don’t have a great answer.
I do know this: Ryanair, Europe’s discount powerhouse, makes a bit of money on tickets that are never flown, and it collects money on fees (wheelchair fees, anyone?) that are mandatory. I recall a statistic that as many as 1/3 of tickets were never flown, as of a few years ago. People just buy tickets on the cheap when the sale begins, and if the plans don’t work out, then so be it. Those tickets may be cheap, but they’re pure profit for the airline.
It wasn’t ticket prices alone that killed Skybus, I’m convinced. Skybus failed, in large part, because it was flying to and from cities that really didn’t need the service. Columbus, Ohio is not a hub-worthy airline. Sorry. Ryanair may fly to airports on the outskirts, but they’re still flying to airports in densely populated areas.
The bigger question is why there aren’t MORE discount airlines in the US. JetBlue and Southwest aren’t all that cheap. There really isn’t a Ryanair or Easyjet equivalent here. And Skybus doesn’t count.
April 7th, 2008 at 8:09 pm |
Jack,
P.S. Who’s Matt?
Mark
April 8th, 2008 at 3:37 am |
Mark,
I agree that Columbus may not be a hub worthy airport compared to ATL or ORD, but it has more O&D than Cincinnati. 50% more. CVG has 4M annually, while CMH has just over 6M and that was before Skybus. The Delta hub in Cincinnati is merely a connection point and as we all know, the city pays the highest fares in the nation for its small city hub.
April 27th, 2008 at 9:43 pm |
[…] today. Their homepage contains the now all-too-familiar declaration, as seen in the Maxjet and Skybus shutdowns, that future flights are […]