Skybus launches out of Columbus, Ohio
Tuesday, October 30th, 2007Welcome to Skybus, the new low-fare airline operating out of Columbus, Ohio. It sells $10 seats to at least ten passengers on every flight. It’s a no-frills airline that is modelled after Ryanair, a no-frills airline operating in Europe.
Skybus offers very low ticket prices with everything at a la carte prices. It has no assigned seating. If you want to board early, you pay $10 extra. Soft drinks are $2.
Skybus flies from its Columbus, Ohio center to Burbank, San Diego, Kansas City, Oakland, Bellingham, WA, Richmond, Greensboro, St. Augustine, FL, Ft. Lauderdale, Chicopee, MA, and Portsmouth, NH. It saves money by not allowing connections, not using jet bridges, and flying to smaler airports outside metropolitan areas where airport fees are minimal.
Columbus is not a large market, but it is 118 miles from Cincinnati that has the highest airfares in the country.
Skybus expects to get around intense competition because of the so-called “Southwest Effect,” which states that in each market Southwest Airlines enters, it creates new customers, rather than steal from the current customers. What little passenger defection there is comes from the legacy airlines but it usually creates an increase in passengers. It’s interesting that Skybus flies into several Southwest markets, including Columbus, and Southwest could start seeing their own “effect” being used against it.
Skybus prices are so low that any increase in costs will move it into the red. Skybus’ aircraft are brand new and under warranty, so they should operate with maximum efficiency. Flight attendants are paid $9 an hour at 75 flight hours per month which comes out to $8,100 annually before taxes). In addition they receive a 10% commission on everything they sell during the flight. This 10% commission is split amoung the four flight attendants which translates to a 2.5% commission for each flight attendant. If the plane is full on an average flight and assuming each passenger buys one coke at $2, each flight attendant would see an extra $7.80, or under $14,000 per year gross income. That’s hard to do for a job that requires 75 hours a month. Almost all of the attendants will have to have a second job.
Let’s watch and see what happens.
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