Columbus Skybus Getting Closer to Takeoff

March 23, 2006
The company yesterday said it has raised about $100 million from investors, enough to fund the airline's startup and keep it on schedule for passenger service within a year.

Mar. 22 -- Skybus Airlines, a low-fare carrier formed in Columbus during rough times for the aviation industry, is closer to reality.

The company yesterday said it has raised about $100 million from investors, enough to fund the airline's startup and keep it on schedule for passenger service within a year.

"This is definitely a terrific moment for Columbus and for us," said Bill Diffenderffer, Skybus chief executive. "To raise as much money as we've raised when airlines are going bankrupt and fuel prices are going up, it was a very daunting task."

Customers should expect seven daily flights starting late this year or in early 2007. At that point, Skybus will have two 150-seat planes, a number that will increase to nine in another year. In three years, it plans to have 15 to 20 planes and 25 destinations, Diffenderffer said.

Skybus also promises the lowest fares in the industry thanks to a no-frills approach that includes no first-class seats and online bookings only. But prices and destinations remain undisclosed.

"There are competitive issues around this, and we continue to look at everything," Diffenderffer said.

Skybus enters the market at a highly competitive time, said Tom Parsons, chief executive of Dallas-based Bestfares.com.

"There is no such thing as the friendly skies anymore," Parsons said. "They need to go slow, which they are. I wouldn't go rapidly like Independence Air did."

Independence Air shut down earlier this year, about 19 months after it launched amid much fanfare. Skybus could be more successful if it flies to cities and airports that aren't served by low-fare carriers, and should focus on popular vacation spots among Ohioans, he said.

John Weikle founded the airline in 2003, and retained seed money from Battelle Services Co. Inc., Huntington Capital Investment Co., Nationwide Mu- tual Capital and Wolfe Enterprises Inc., a wholly owned subsidiary of The Dispatch Printing Company.

Weikle decided to pursue starting a low-fare carrier in Columbus after America West pulled its hub from Columbus in 2003, he said. Other local investors include American Electric Power, Grange Mutual and the Schottenstein family.

"One of the most important economic assets that a city can have is an airport," said Bob Milbourne, a Skybus investor and board member who also is president of the Columbus Partnership.

"In Columbus, where we are relatively underserved, as far as airlines go, this effort to launch Skybus could be one of the most important things ever to happen."

When asked whether Columbus could support an airline, Weikle and Diffenderffer pointed to the number of people who could drive to Columbus, if the price of tickets was right, to fly on the airline.

"Columbus is the 15 th-largest city in the United States, but more importantly for us, there are 6.7 million people within 100 miles of the airport and 29 million within 200 miles," Weikle said. "It's the Ryanair business model. I was intrigued when I saw that little Irish airline making 20 percent net margins consistently."

Charlie Clifton, a former top official of Ryanair, based in Dublin, Ireland, has been a leader in Skybus fund-raising efforts, as have Ken Gile, a former Southwest official, and Robert Kidder of Stonehenge Partners.

Skybus plans to fly to the East Coast, West Coast, Gulf Coast, Canada and the Caribbean. Last week, Diffenderffer said the carrier did not consider Las Vegas, Chicago or Tampa, Fla., as destinations for Skybus.

Company officials also said they haven't decided which Columbus airport they will use. Diffenderffer said it is interested in secondary terminals, like Rickenbacker, in some cities, but also likes Port Columbus.

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