Upstart Ohio Airline Purchases a Fleet of Airbuses

Skybus Airlines, a new Columbus, Ohio-based carrier that plans to start service next year, has agreed to buy 65 Airbus A319s for delivery beginning in 2008.

The order, with a list price of $4.3 billion, would be one of the largest Airbus aircraft sales to a U.S. startup airline, Skybus said Thursday.

The closely held airline said it will begin flights from Columbus in April with four leased A319s that are painted shades of orange.

Skybus will face competition from Southwest Airlines and JetBlue Airways, which began service from Columbus to New York on Oct. 3.

"It'll be an uphill battle" for Skybus, said George Hamlin, a consultant at Morten Beyer & Agnew in Arlington, Va. "Southwest is growing at Columbus, and Southwest doesn't play well with others."

Southwest controls 22 percent of the market at Port Columbus International Airport.

"We're not about to relinquish the low-fare leadership position," said Ed Stewart, spokesman for Dallas-based Southwest. "They're just another competitor."

JetBlue spokeswoman Jenny Dervin said the carrier's growing network and in-flight television are more compelling to Columbus travelers than a potential startup airline. New York-based JetBlue ordered 75 Airbus A320s in 1999 and began flying in February 2000.

Skybus didn't say how much it will pay for the Airbus planes. Airlines generally get substantial discounts for large orders. In standard configuration, the single-aisle A319s seat 124 passengers, although Skybus may use more seats because it won't offer first-class service.

Skybus aims to start flying to "major markets" from Columbus in April, spokesman Bob Tenenbaum said, declining to be more specific. Fares "will be lower than any other airline serving the city," he said.

The Department of Transportation on March 14 granted Skybus permission to operate commercial flights in the U.S. and Canada.

"Our business model is not to take business away from other airlines, but to compete with the family automobile and the price of gas," Chief Executive Officer Bill Diffenderffer, 56, said in an interview. "People make flying decisions on the basis of price and schedule, not in-flight TV."

Also this week, Airbus said it will set up a plant in China to win a greater share of sales there. The factory in eastern China, Airbus' first final assembly plant outside of Europe, will eventually produce as many as four of the A320 planes a month, Chief Executive Officer Louis Gallois said.

China also ordered 150 of the A320s.



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