Skybus Airlines announces shutdown

April 4, 2008 9:08:21 PM PDT
Low-cost carrier Skybus Airlines is shutting down Saturday and plans to file for bankruptcy protection next week, becoming the latest of the nation's airlines to fall because of rising fuel costs and a slowing economy. The announcement Friday came less than a year after Skybus started up at Port Columbus International Airport, offering several $10 flights. The airline's situation worsened in recent weeks, said Skybus spokesman Bob Tenenbaum.

Fuel prices and the worsening economy combined to be insurmountable for a new carrier, said chief executive Michael Hodge.

"We deeply regret this decision, and the impact this will have on our employees and their families, our customers, our vendors and other partners, and the communities in which we have been operating," Hodge said in a statement.

The airline makes 74 daily flights to 15 U.S. cities, Tenenbaum said. It has about 350 employees in Columbus and 100 at a second hub at Piedmont-Triad International airport in Greensboro, N.C. Employees learned of the shutdown Friday night.

The final flight, taking off from Fort Lauderdale, Fla., was scheduled to touch down in Columbus just before 1 a.m. Saturday, Tenenbaum said.

He did not know how many passengers would be affected but said the company has flights scheduled through Sept. 2. They are eligible for a full refund.

The airline said that all flights were to be completed Friday and that it plans to file Monday for Chapter 11 bankruptcy protection.

Skybus is pulling the plug less than two weeks after CEO Bill Diffenderffer resigned to pursue a book-writing career. He was succeeded by Hodge, the company's chief financial officer for the past year.

Skybus has endured some bumps since it began flying May 22, 2007. Over two days during Christmas week, the airline canceled as many as a quarter of its flights because of problems with two of its planes. Recently, it has been dropping flights and destinations because of high fuel costs.

Skybus offered at least 10 seats for $10 on every flight. The airline advertised an a la carte, pay-per-service flying experience. Checking a bag cost $12 at the ticket counter, for instance, while boarding with the first group of passengers cost $15.

"Most airlines tell you you're not paying for baggage, but the fact is, you are paying for it," Tenenbaum said. "It's built into the cost."

The announcement adds to a string of bad news for airlines, which have been hurt by a slowing economy, high fuel prices and maintenance concerns.

ATA and Aloha Airlines both stopped flying this week after filing for bankruptcy protection. American, Southwest and Delta airlines have all had to cancel flights recently to address safety concerns about some of their aircraft.