Skybus Gets Off Ground in May with Ryanair-like Pricing

Operating from uncongested airports to keep the carrier's costs down, Skybus will contract out its maintenance, ground handling and most other positions. Beyond the airline's small management team, about the only employees will be the pilots and flight...


Airline start-up Skybus announced Tuesday that it will launch service next month from its Columbus, Ohio, base, moving discount travel in the USA closer than ever to the bare-bones model pioneered by Europe's popular Ryanair.

CEO Bill Diffenderffer says the new airline will make its splash in the crowded domestic airline business with ultralow fares and separate charges for services from baggage handling to onboard snacks. As a permanent pricing feature, Skybus plans to make 10 seats on all flights aboard its 150-seat Airbus A319s available at $10 each way. Average fares will be pegged at about 50% of the going rate of other carriers serving the same markets.

The key to success, Diffenderffer says, is "simple pricing philosophy. ... We want to stimulate people to travel who otherwise would not go."

The carrier will begin May 22 with flights between Columbus and Burbank, Calif.; Portsmouth, N.H.; and Kansas City. The next day, it will launch service to Richmond, Va., and on May 29 service to Fort Lauderdale; Greensboro/Winston-Salem, N.C.; and Bellingham, Wash. On June 12, it will add service to Oakland and a second daily flight to Burbank.

The airline is promoting Bellingham as service to Seattle, 94 miles away, and to Vancouver, British Columbia, 50 miles away. Portsmouth is billed as service to Boston, 50 miles away.

Like Ireland-based Ryanair, which has led discount carriers globally in unbundling the cost of various services from the basic fare, Skybus will charge customers $5 to check a bag.

The fee soars to $50 a bag after the first two bags. Pillows and blankets will be available for purchase onboard, along with food and beverages. All fares will be non-refundable, and Skybus will charge $40 to make a ticketing change. Skybus also plans to sell the sides of its planes as flying billboards.

Operating from uncongested airports will help keep the carrier's costs, and therefore, its fares, down, Diffenderffer says, as will outsourcing virtually all of its maintenance and ground handling. Beyond the airline's small management team, about the only employees will be the pilots and flight attendants. Most others will be contract workers.

Staying power?

Skybus initially appears to have staying power. It's beginning service with about $160 million in capital raised from investors that include Fidelity Investments and Morgan Stanley. It also has backing from formidable hometown companies, including insurance giant Nationwide and Wolfe Enterprises, owner of the local newspaper, The Columbus Dispatch.

By comparison, 8-year-old JetBlue, which became one of the most successful start-ups in U.S. airline history, raised $130 million before its launch.

Skybus first filed for certification as an airline in January 2005, but it traces its beginnings to the mid-1990s when co-founders John Weikle and Ken Gile, working with JPMorgan, tried to organize Heartland Airlines based at Dayton, Ohio. The effort fell short of raising the necessary capital to launch and was discontinued after the 9/11 terrorism.

Gile and Weikle rekindled the concept in Columbus in 2003. Gile, a former Southwest Airlines chief pilot, now serves as Skybus' president and COO, while Weikle, a former Emery Worldwide Airlines executive, is listed on the company's website as its founder, though without specific duties.

This content continues onto the next page...

We Recommend