How Skybus Took Flight; Skybus' Start Shows Promise

Company leaders fought hard to get airline off the ground, and customers are buying in

As Skybus Airlines taxis toward its inaugural flight on Tuesday, it enters a stormy industry that has grounded many discount airlines before it.

But experts say Skybus, founded with the help of Columbus businessmen, is the best-funded startup since deregulation, launching with $160 million that includes backing from the likes of Morgan Stanley and Fidelity.

Investors have been swayed by business models similar to those of Southwest Airlines and Ryanair, which has been wildly successful in Europe.

Skybus will offer U.S. travelers some new twists.

Every flight will offer at least 10 tickets for $10 each, a low-cost strategy that also includes charging for everything from checked bags to soft drinks.

You want a ticket? You can only book online at the Skybus Website, .

You want to go to a few places off the beaten path? Skybus flies to Portsmouth, N.H., more than an hour's drive north of Boston and right next to the Maine coast. Or try Bellingham, Wash., between Seattle and Vancouver, British Columbia.

The strategy seems to be working so far, as more than 200,000 tickets have been sold since they went on sale at 6 a.m. on April 24.

"I purchased six tickets to L.A. before 8 a.m.," said Cynthia Rickman, a public-information officer for the city of Columbus. "I got on and started booking three tickets for myself, my husband and my stepdaughter. Then I called my sister in Pittsburgh."

Today's quick pace is quite a contrast to the long, slow road that has been traveled to get Skybus off the ground.

"There are about a thousand moving parts to starting up an airline," CEO Bill Diffenderffer said recently. "If I'd known how many, I probably would've run screaming when they asked me if I wanted to run a start-up airline."

Dayton-area businessman John Weikle had the original vision.

He had tried to start a regional business carrier called Heartland Airlines out of Dayton in the late 1990s, but it failed. By 2002, he had a new plan for a very low-cost airline that could compete against Southwest, whose costs and prices were creeping up.

Basing it in Columbus seemed an obvious choice after America West announced in early 2003 that it would close its hub at Port Columbus.

Within days of the America West announcement, Weikle made a pitch to Port Columbus officials. An outside consultant hired by the airport told them that Skybus would work.

Weikle discovered that it helps to be connected in Columbus when seeking financial support. After receiving a tepid response, he was close to taking his plan to Indianapolis or back to Dayton.

But Port Columbus officials were able to link Weikle with both Mayor Michael B. Coleman and Thomas Hoaglin, chief executive at Huntington Bank. With them on his side, Weikle was off and running.

Local investors came on board. The largest included Nationwide Mutual Capital, Huntington Capital Investment Co., Battelle Services Co. and Wolfe Enterprises Inc., a subsidiary of The Dispatch Printing Company, which publishes The Dispatch.

Ryan Helon, managing director of Nationwide Mutual Capital, said his company's multimillion-dollar investment was based on both a commitment to Columbus and confidence in the Skybus plan.

"We saw clearly that there was a market need in Columbus," Helon said. "We thought ... Columbus could draw those people from a large area including Akron, Cincinnati and Cleveland."

By late 2004, Weikle said, it had become apparent that Skybus needed someone with "name value" and chief-executive experience to lead the company to the next level. The venture already had attracted a handful of experienced talent, including Ken Gile, a pilot and 25-year veteran of Southwest Airlines who is now president of Skybus and its third-largest individual investor.

An executive search yielded several names, including those of Bill Diffenderffer and Charlie Clifton.

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