Skybus goes Bust…

Oh boy. A bad, bad week for the airlines. First Aloha shuts down and now, Skybus. For those of you who may never have heard of Skybus, they opened their doors less than a year ago. Their business model was very flawed, focusing on a great marketing program and a weak business plan (streamlined costs -you paid extra for any add-ons, including luggage stowing and advertised $10 fares.) Hubbed out of Columbus, no phone numbers…all internet driven. Like a poorer cousin of Jet Blue or Southwest. I took one flight on Skybus this year. Seats were not that comfortable, but the price was incredible. The flight should have been packed…it was about 1/2 full. But I wondered at the time if they could make ends meet even if the flight had been full. About 350 people lost their jobs.

Additionally, American, Delta and Southwest have had quality control issues and had to cancel some flights.

And today, American announced that they are in a hiring freeze.

From AP:

“American’s hiring freeze is the latest sign of trouble in the airline
industry. Skybus, ATA and Aloha Airlines have stopped flying in the past week
and are 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.”

I know I’ve been tightening my belt, as have many of my friends and colleagues because of my financial concerns for the next year. When air travel is affected by oil prices to the point that so many airlines (including established ones) are having trouble, and yet, oil companies are posting record profits, it has to make you wonder. Are we are being forced into a recession? If oil companies were losing money and the airlines were in trouble, that would make some sense. Oil prices would be going up to help support oil production costs. But, given that oil profits don’t seem to be sinking (or maybe I’m not seeing something…) then are we in a manufactured pseudo-recession? And why?

2 thoughts on “Skybus goes Bust…

  1. This completely sucks for the many folks who are stuck someplace unfamiliar. People are very vulnerable when traveling and it is a crime to take advantage of them. I hope that the executives over at Skybus end up before a Senate Hearing this fall!

  2. There were a lot of stranded passengers. Other airlines are not obligated to honor tickets, but I understand that many of them tried to help out stranded passengers as best they could. A very costly day, however, for anyone who had to get on a flight with another carrier.

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