Skybus Redux ...

June 3, 2009
... or John Weikle’s next great adventure (or one-year wonder?) -- Jet America. It was announced this week that the new ultra-low cost airline will begin serving mid-sized U.S. cities this summer. The question that must be asked is, are airports and communities across the country once again setting themselves up for disappointment when the new airline craters financially? JetAmerica is the brainchild of Skybus founder Weikle. I’ve never met him, but he appears to have two strengths in particular: attracting investment dollars and getting attention with ridiculously low fares. At Skybus, it was $10 fares; with JetAmerica, it’s $9. One has to wonder how many of those $10 fare-paying passengers were left stranded when Skybus abruptly shut down operations last year. JetAmerica is scheduled to launch operations on July 13, connecting places like Toledo, South Bend (IN), and Melbourne (FL) with Newark and Minneapolis. The carrier will operate 737-800s and initially will offer 34 non-stop flights per week. CEO Weikle, on the company’s website (www.JetAmerica.com), comments, “Our goal is to fly wherever JetAmerica can offer air fares of at least 40 percent less than competitors.†As with other low-cost airlines, the Jet America business model is based on flying routes to mostly secondary, underserved cities. According to reports, the Lansing, South Bend, Melbourne, and Toledo airports are subsidizing JetAmerica with $1.4 million in grants in its first year, along with about $867,000 in waived airport fees and $1.1 million in marketing and advertising assistance. South Bend, Toledo and Melbourne apparently received their grants from the U.S. DOT’s Small Community Air Service Development Program. Started in 2002, the SCASD program has had its successes and failures in trying to help communities attract new air service. (The Boyd Group offers a good discussion of the SCASD program on its website, www.aviationplanning.com.) Ultra-low cost carriers have had some degree of success globally – notably Ryanair in Europe. Perhaps this time Weikle’s enterprise will take hold, and not abruptly leave passengers and communities stranded. But it seems reasonable to question whether or not federal dollars should be used to facilitate a start-up operation. It may prove an interesting discussion to have one year from now. Thanks for reading. jfi